Adverse Financial Selection
Process in which the policy-holder surrenders the policy when:
- cash proceeds can be invested elsewhere at a higher return than that being earned on the cash value within the policy;
- economic recession or depression exists and the cash is required to meet other financial obligations. If the policy-holder exercises the CASH SURRENDER VALUE option during these economic circumstances, the company may have to sell assets at a "fire sale" and will have fewer funds to invest at advantageous rates of return.
Popular Insurance Terms
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Method of establishing rates in which the current year's premium is calculated to reflect the actual current year's loss experience. An initial premium is charged and then adjusted at the ...
Rules of conduct and commissions paid to agents. For example, under the rules of conduct agents may be required to submit all of their business to only that agency. The contract also lists ...
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Individual who has met professional standards of the Internal Revenue Service and the Department of Labor for signing the actuarial reports required by the Employee Retirement Security Act ...
Covers property damage and theft coverage in two areas not subject to a coinsurance requirement or a deductible. Coverage A. If the bank becomes liable for loss to a customer's property ...
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