The Guardian Life Insurance Company of America 7 Hanover Square, New York, NY 10004

Insure:Insure:DEFINITIONSDEFINITIONS::

To make certainTo make certain, especially by , especially by taking necessary measures and taking necessary measures and precautions.precautions.

DEFINITIONS:DEFINITIONS:Insurance:Insurance:

Coverage by contractCoverage by contract whereby one party whereby one party undertakes to undertakes to indemnifyindemnify or or guaranteeguarantee another another against loss by a specified contingency or against loss by a specified contingency or peril, peril, or, the means of eliminating or reducing or, the means of eliminating or reducing the financial burden of risk by dividing the the financial burden of risk by dividing the losses they produce among many individuals.losses they produce among many individuals.

DEFINITIONS:DEFINITIONS: Indemnify:Indemnify:

To make compensation forTo make compensation for incurred hurt, loss, or damage.incurred hurt, loss, or damage.

DEFINITIONS:DEFINITIONS: Life InsuranceLife Insurance

Insurance providing for Insurance providing for paymentpayment of a stipulated sum to a designated of a stipulated sum to a designated beneficiary beneficiary upon death of upon death of the insuredthe insured..

BeneficiaryBeneficiary::

DEFINITIONS:DEFINITIONS:

The The person named to person named to receive proceedsreceive proceeds or benefits.or benefits.

Risk Management:Risk Management:DEFINITIONS:DEFINITIONS:

The use of all the The use of all the alternative alternative methods of dealing with riskmethods of dealing with risk......

- waiving of liability or exercising - waiving of liability or exercising insurance to insurance to indemnifyindemnify

transfer of risk transfer of risk

- conscious act of keeping - conscious act of keeping or assuming risk or assuming risk

retention of riskretention of risk

reduction of riskreduction of risk

avoidance of riskavoidance of risk

PremiumPremium::DEFINITIONS:DEFINITIONS:

Consideration paidConsideration paid for a for a contract ofcontract ofof insurance.of insurance.

ConsiderationConsideration::DEFINITIONS:DEFINITIONS:

An act, or the An act, or the promisepromise thereof thereof done or given by one party done or given by one party in return in return for the act or promise of another.for the act or promise of another.

Policy Dividends:Policy Dividends:

DEFINITIONS:DEFINITIONS:

Return of unneeded premiumReturn of unneeded premium, , and are not subject to income taxation.and are not subject to income taxation.

ProceedsProceeds::

DEFINITIONS:DEFINITIONS:

- at death of the - at death of the insured (under any insured (under any payout arrangement)payout arrangement)

To BeneficiaryTo Beneficiary

- or at election of income - or at election of income settlement optionsettlement option

- at surrender of policy- at surrender of policyTo InsuredTo Insured

Amount of benefits paid outAmount of benefits paid out

Common Types ofCommon Types of

Profit-seeking insurers or "stock" Profit-seeking insurers or "stock" companiescompanies

Policies sold are fixed-price, non-participating Policies sold are fixed-price, non-participating (non-par) policies, i.e. no dividends paid to (non-par) policies, i.e. no dividends paid to policyholders.policyholders.

Pay dividends to stockholdersPay dividends to stockholders after payment after payment of claims, expenses, and “possibleof claims, expenses, and “possible” provisions provisions for additions to surplusfor additions to surplus

Owned by stockholdersOwned by stockholders who provided original who provided original capital or who acquired stock from other capital or who acquired stock from other stockholdersstockholders

Stock CompanyStock Company

Stock Stockholders receive Stockholders receive common stock dividends common stock dividends (profit goes to (profit goes to stockholders)stockholders)

PolicyPolicy

No dividends paid to policyholders

Common Types ofCommon Types of

Non-Profit insurers or “mutual" Non-Profit insurers or “mutual" companiescompanies

Dividends are paid to policyholdersDividends are paid to policyholders

No capital stock, no stockholders, No capital stock, no stockholders, owned byowned by policyholderspolicyholders

Mutual CompanyMutual Company

Policyholders Policyholders receive policy receive policy dividends (return dividends (return of excess of excess premium)premium) PolicPolic

yy

PolicyholdersPolicyholders are are the owners of the the owners of the companycompany

Common Types ofCommon Types of

Fraternal Benefit SocietiesFraternal Benefit Societies

Receive tax benefits because they Receive tax benefits because they operate for the benefit of a charitable or operate for the benefit of a charitable or religious affiliation.religious affiliation.

Operate for the benefit of a narrow,Operate for the benefit of a narrow, defined groupdefined group

Similar to mutual companies in designSimilar to mutual companies in design

IBWIBW

BBPoliPoli

cycy

Fraternal CompanyFraternal Company

Policyholders Policyholders receive policy receive policy dividends (return dividends (return of excess of excess premium)premium)

Company receives tax Company receives tax benefits: operates for benefits: operates for the benefit of a the benefit of a charitable or religious charitable or religious affiliationaffiliation

Grand Grand Poo-BahPoo-Bah

Grand Grand Poo-BahPoo-Bah

International International Brotherhood of Brotherhood of Water BuffaloWater Buffalo

International International Brotherhood of Brotherhood of Water BuffaloWater Buffalo

The Guardian Life Insurance Company of America 7 Hanover Square, New York, NY 10004

See Different Types of Life See Different Types of Life Insurance Covered InInsurance Covered In