Investments
Definition of "Investments"
Money expended with the object of profit. The goal of an insurance company is to invest in assets with a rate of return greater than that to be paid out as benefits under its policies. Traditionally, life insurance companies have invested in long-term financial instruments such as mortgages. Today, under current assumption life insurance policies, investments are in short-term financial instruments. Property and casualty insurance companies, because of the nature of their policies, favor short-term financial instruments as investments.
Popular Insurance Terms
Same as term Material Misrepresentation: falsification of a material fact in such a manner that, had the insurance company known the truth, it would not have insured the risk. A material ...
Measure showing how much life insurance an agent has lost through replacement. It is expressed as a percentage of number of policies, face amount, or premium volume. ...
Insurance company's reinsurance commissions and expense allowances divided by its adjusted surplus account. The smaller this ratio, the more financially sound the insurance company, since ...
Organization based in Washington, D.C., that is composed of risk and insurance managers of various public entities, to include municipalities and school boards. ...
Minimum degree of injury or loss for which an injured party can sue, even though covered by no fault automobile insurance. Traditionally, an accident victim had to prove the other driver ...
Contractual obligation that requires one party to the contract to fulfill its obligation before another party to the contract is required to fulfill its contractual obligation. For example, ...
Stipulation that every participant in health care has the right according to law to purchase health insurance from a private insurance entity. The participant's purchase is voluntary and ...
Annuity that begins payments after a single premium is paid. For example, the annuitant pays a single premium of $100,000 on June 1 of the current year and begins receiving a monthly income ...
To accumulate. For example, under one of the dividend options of a participating life insurance policy, dividends can accumulate at interest by leaving them with the insurance company; cash ...
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