Coinsurance Plan Of Reinsurance
Definition of "Coinsurance plan of reinsurance"
Type of proportional reinsurance under which the ceding company (primary insurer) cedes a portion of the face amount of the life insurance policy it has underwritten to its reinsurer. The reinsurer, in the event of the death of the insured, is obligated to pay its pro rata share (thus the alternate name pro rata reinsurance) of the death benefit to the ceding company that in turn must pay the full death benefit to the insured's beneficiary. Under this plan, the reinsurer is also obligated to pay its pro rata share of all settlement options under the life insurance policy to include the cash surrender value. The reinsurer receives from the ceding company a pro rata share of the gross premiums paid on the policy to the ceding company. In return, the ceding company receives a ceding commission (to cover its expenses incurred in marketing, underwriting, and distributing the life insurance policy) from the reinsurer.
Popular Insurance Terms
Trust whereby asset management is provided until a child reaches the age of majority. Upon reaching majority, the child has full use and control over the assets. The grantor of the trust ...
Type of benefit in which an employee obtains shares of stock in the company, the amount normally determined by the employee's level of compensation. ESOP acts as a leverage tool through ...
Property insurance closely associated with fire insurance and usually purchased in conjunction with a Standard Fire Policy. Allied lines include data processing insurance, demolition ...
Policyholder's equity share of the life insurance company's assets. The share is based on the policyholder's contribution to assets (the company's gross premiums minus cost of insurance, ...
Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old living room sofa will not be replaced at ...
Coverage for an employer in the event of dishonesty of any employee. ...
Policy of variable universal life insurance (VUL) under which, if the accumulation of the premiums paid at any point in time (minus policy loans, and withdrawals) equals or exceeds the ...
Combination of the federal estate tax and the federal gift tax. ...
Fund that contains the portion of the premium that has been paid in advance for insurance that has not yet been provided. For example, if a business pays an annual premium of $1000 on ...
Have a question or comment?
We're here to help.