Full Preliminary Term Reserve Plan


Definition of "Full preliminary term reserve plan"

Melanie  Stanton Bolden real estate agent
Melanie Stanton Bolden, Real Estate Agent Mustard Seed Realty Group

Method of valuing a reserve under which a life insurance policy, from an actual point of view, combines one-year term insurance and a one-year deferred plan. Here the net premium is sufficient only to pay first-year death claims. For example, a 10-pay life insurance policy issued at age 30 would be viewed actuarially, for full preliminary term reserve plan purposes, as one-year term insurance at age 30 plus a nine-pay policy issued at age 30 but deferred to age 31.

 

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