Redetermination Provision
Provision found in current assumption whole life insurance policies under which the insurance company retains the contractual right to recalculate the premium (after a minimum period of time that the policy has been in force). However, the company guarantees that, at the least, a minimum interest rate will be credited to the cash value and, at the most, a maximum mortality charge will be subtracted. The resultant new premium may be greater than or less than the original premium. If the new premium is greater than the original premium, the policy owner may pay this greater premium, thereby retaining the original death benefit under the policy, or the policy owner may still pay the original premium, but the new death benefit will be lower than it was originally. On the other hand, if the new premium is less than the original premium, the policy owner may pay this lesser premium, thereby retaining the original death benefit under the policy, or the policy owner may still pay the original premium with the death benefit becoming greater than it was originally, or the difference in the new premium and the original premium can be added to the policy's cash value.
Popular Insurance Terms
Use of a life insurance policy dividend by the owner of a participating policy. Here the policy dividend is left with the insurance company to accumulate at a guaranteed minimum interest ...
Same as term Application: written statements on a form by a prospective insured about himself, including assets and other personal information. These statements and additional information, ...
Legislation mandating that factors taken into account in the calculation of premium rates for automobile insurance include the insured's driving record, annual miles driven, and years of ...
Maximum that an insurance company can underwrite. The limits of coverage that a property and casualty company can underwrite are determined by its retained earnings and invested capital. ...
Coverage that exceeds the normal insurance capacity of an insurer or reinsurer. ...
Endorsement to an existing policy or a separate policy covering loss of rental income to the property owner, caused by the damage or destruction of a building, rendering it unrentable. The ...
One of two bureaus that writes forms and files standard rates for inland marine insurance. The other is the inland marine insurance bureau. ...
Trust in which rights to make any changes therein are retained by the grantor. At the grantor's death all rights become irrevocable. This type of trust has several advantages: it can avoid ...
Kindling intentionally set in a fireplace, stove, furnace, or other containment that has not spread beyond it. Property insurance does not protect against damage from a friendly fire. For ...
Have a question or comment?
We're here to help.