Amount At Risk
- difference between the face value of a permanent life insurance policy and its accrued cash value. The pure cost of protection is based on this difference. For example, if the face value of a lifeinsurance policy is $100,000 and the cash value is $80,000 then the net amount at risk is $20,000. From the Internal Revenue Service perspective, a corridor of protection or net amount of risk must beapparent in a life insurance policy if the policy is to retain its tax advantaged treatment.
- in property and liability insurance, the lesser of the policy limit or the maximum possible loss to the insured.
Popular Insurance Terms
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Exchange of a new policy for one already in force. ...
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Means of providing insurance protection for the property of a business that is not at a fixed location. ...
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Ratio of authorized control level risk-based capital of an insurance company to its total adjusted capital. This statistic determines regulatory action taken by the state's insurance ...
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