Finite Risk Insurance
Type of insurance that provides a single aggregate limit of coverage within the insurance policy terms, thereby limiting the insurance company's liability for a risk transferred to it. The insurance coverage is tailored to the requirements of the insured company to reflect the insured's actual coverage needs. If the insured's losses are favorable, the insured receives the return of a portion of the premium paid. The insured's premium costs are based on the insured's own loss experience, rather than the overall loss experience of a pool of similar insureds. In essence, through this type of insurance, the insured pays for exposure to loss and if there is not a substantial loss, the insured receives the return of a portion of the premium paid in. This insurance mechanism is ideal for insureds who exhibit a frequency distribution of high severity loss or an unusual loss frequency.
Popular Insurance Terms
Assets, such as furniture and fixtures, that are not permitted by state law to be included in an insurance company's ANNUAL STATEMENT. ...
Sum of money to be received by an insured in the event a given loss occurs. ...
Method of calculating the life insurance policy's cash surrender value (CSV) not contingent upon the calculation of the policy's reserve such that the CSV will approximate the asset share ...
Ownership of property by two or more persons who do not have rights of survivor ship. The share of a deceased tenant passes to that person's heirs and not to the other tenants. Because ...
Combination of whole life and level term that provides income to a beneficiary for a selected period of time (e.g., 20 years) if an insured dies during that period. At the end of the ...
Section of a policy that specifies the dollar amount or percentage of any loss that the insurance does not pay. Most property and medical policies specify that the first portion of any loss ...
The right to purchase insurance without physical examination; the present and past physical condition of the applicant are not considered. ...
Limiting provision. Exclusions listed in group health plans include: benefits under Workers Compensation; certain dental procedures; convalescent or rest cures; medical expenses resulting ...
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 ...
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