Initial Premium

This activity applies the first premium payment to the policy.  It must be processed before the policy can be issued.  You must associate a suspense record with this activity so that the money can be tracked in the system.

Click Add Activity on the Secondary menu and select Initial Premium from the Activity drop-down box.  

Enter the values for this activity and then click OK.  A description of each field is listed below.

• Effective Date - the date the initial premium becomes effective.

• Gross Amount - the total amount of the initial premium.

• PreTEFRA Amount -  tracks money contributed before the TEFRA law went into effect.

• Cost Basis Provided - in the case of a transferred policy, this is the amount of money indicated as cost basis from the transferring company.

• Funding Method - determines whether the policy is funded with pre or post tax contributions.

• If the policy is a Qualified policy, then the Funding Method displays Premium and Replacement options that must be selected.

• If the policy is a Non-Qualified policy, then the Funding Method displays Premium and 1035 Exchange Options

• PostTERFRA Amount - tracks money contributed after the TEFRA law went into effect.

• Replacement Type - can be traditional or rollover.

You also need to establish a suspense record for the initial premium amount.  After you have created a suspense record you need to associate the record with the initial premium activity.  

Steps to Associate a Suspense Record with an Activity

1. Click Add Activity on the Secondary menu and select the activity from the drop down box.

2. Enter all of the activity details.

3. Click the Suspense link at the top of the window.

4. Enter the suspense record number in the current suspense field and select OK at the bottom of the screen.  The activity will be displayed on the activity screen along with a lightening bolt icon so that you can process the activity.