Valuation Premium
Life insurance rate determined by the valuation of company policy reserves. State regulators set strict standards for policy reserves to make certain that life insurers will have enough assets to make good on their policies. Once the reserves are valued, the company works backward to set a valuation premium that will cover all of its liabilities. However, some companies determine that they can justify setting a GROSS PREMIUM that is lower than the valuation premium because their experience, based on updated mortality tables, is better than that used to determine the valuation premium. If they do charge a premium that is lower, they are required to deposit the difference in a DEFICIENCY RESERVE.
Popular Insurance Terms
Section describing coverages under a policy. Elsewhere in the policy other sections may restrict or exclude coverages. ...
Company formed and operated without the profit motive as its normal business objective; normally sells and services health insurance policies. ...
Law that established rules and regulations to govern private pension plans, including vesting requirements, funding mechanisms, and general plan design and descriptions. For example, three ...
Same as term Conditional Sales Floater: coverage for the seller of property on an installment or conditional sales contract if it is damaged or destroyed. For example, a television set is ...
Same as term Comprehensive Insurance: complete coverage for hospital and physician charges subject to deductibles and coinsurance. This coverage combines basic medical expense policy and ...
Information generated by the medical information bureau (MIB) and made available to member companies concerning medical information of applicants for life and health insurance. Member ...
Licensed agent's signature on an insurance policy. ...
Trust in which the trustee distributes capital and income to the beneficiaries of the trust according to their economic needs. ...
Rate not subsequently adjusted. The rate stays in effect regardless of an insured's subsequent loss record. ...
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