Initial Premium

This activity applies the first premium payment to the policy. It must be processed before the policy can be issued. A suspense record must be associated with this activity to track the money in the system.

Note: Create any necessary suspense records before adding activities that apply money to the policy. This work flow is necessary to avoid closing the Policy screen in the middle of adding an activity.

Steps to Add Initial Premium Activity

Click Add Activity on the Secondary menu and select Initial Premium from the Activity drop-down box.
Enter the values for this activity. 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 the 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.

Click the Suspense link at the top of the window and enter the number of the suspense record that should be associated with this policy.
Click OK. The activity will be added to the Activity screen.
Click the lightning bolt icon to the right of the activity on the Activity screen. This will process the activity and apply premium to the policy.

Initial premium activity

Add Activity Window with InitialPremium Selected