Cash Flow Underwriting
Definition of "Cash flow underwriting"
Pricing of the insurance product below the necessary premium rate to reflect the costs of expected losses. The thesis of this pricing strategy is to obtain large sums of money to invest and earning a greater return on the investment than the costs associated with the underpricing of the insurance product.
Popular Insurance Terms
Plan whereby adjustments are made in the premium, as the premium increases to reflect the non proportionate increases in expenses. Generally, the expenses of acquisition costs, ...
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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; ...
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in property and casualty insurance, termination of a policy because of failure to pay a renewal premium. in life insurance, termination of a policy because of failure to pay a premium and ...
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