Premium Deficiency Reserve
Definition of "Premium deficiency reserve"
Supplementary life insurance reserve required by state regulators when the gross premium is lower than the valuation premium. Some life insurers are able to charge policyholders a premium that is lower than required by the reserve valuation system they use. This may be because mortality tables are outdated and their own experience reflects different loss statistics. But if the insurer charges a premium lower than that dictated in the calculation of policy reserves, it must set up a deficiency reserve for the difference.
Popular Insurance Terms
Cost of the assets listed on the accounting records of the company. These assets include the following: real estate (to include any adjustments for depreciation), transportation equipment ...
Application for a policy, in life insurance, accompanied by the first premium; in property and casualty insurance, the insurance application itself. ...
Combination of two basic plans: accumulating units of paid-up permanent life insurance, and decreasing units of group term life insurance. The premium paid each month consists of the (a) ...
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Value in life insurance policies that entitle the insured to these choices: to relinquish the policy for its CASH SURRENDER VALUE. (Note that in the beginning years the cash value may be ...
Written statements on a form by a prospective insured about himself, including assets and other personal information. These statements and additional information, such as a medical report, ...
Transfer of the cash value of the policy from the policyowner to the policyowner's creditor as security for a loan. ...
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Value of a share of common stock, derived by dividing the total common stockholders' equity at the end of a period of time by the total number of shares outstanding at the end of the same ...
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