Finite Risk Insurance
Definition of "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
Property insurance premium rate that is applicable to a single, particular piece of property. ...
Present value of a series of payments such that the first payment is due immediately, the second payment one period from hence, the third payment two periods hence, and so forth. The ...
Length of time required to amortize the excess expenses of acquiring a given group of life insurance policies. In acquiring a policy, a life insurance company may incur expenses (such as ...
Coverage that does not put a dollar value on a hull or cargo that is insured. A valued marine policy puts a specific value on the insured property. With unvalued property, the value is ...
Type of individual retirement account (IRA) allowed by the employee retirement income security act of 1974 (ERISA), in which contributions are paid into the bank's interest-bearing ...
Term life insurance, usually purchased at an airport by an airplane passenger. It provides a death payment to the passenger's beneficiary in the event of a fatal accident on one or more ...
Organization that develops and publishes educational material and administers national examinations in supervisory management, general insurance, claims, management, risk management, ...
Type of pension in which benefits may vary depending on the investment performance of the pension plan assets. Contributions are made to fund a target benefit, such as 35% of compensation, ...
Measure of policyholder interest in a variable annuity policy prior to the annuity date. This measure is similar to a unit in a mutual fund. ...
Have a question or comment?
We're here to help.