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
Legal case in which the United States Supreme Court held that pension assets are to be excluded from the bankruptcy estate of the plan participant. ...
Trust that is established by people still alive. ...
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Statistical projection of future illness, sickness, and disease. ...
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Insurance contract under which a policy owner cannot be assessed for adverse loss and expense experience of the insurance company. ...
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