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
Provision applied as a rider attached to an ordinary life insurance policy for the purpose of meeting estate planning requirements. When the insured dies, the beneficiary is entitled to ...
Group that, with the exception of the government, establishes the standards for all financial accounting and reporting for the various entities in the United States. The standards enable ...
Practice in which no funds are set aside on a mathematical basis to pay for expected losses. This occurs when a risk manager is not aware of an exposure, when the cost of treating an ...
Nominal interest rate minus the rate of inflation. ...
Relationship of the frequency of illness, sickness, and diseases contracted by individual members of a group to the entire group membership over a particular time period. ...
Same as term Casualty Actuarial Society: accrediting body for the ACAS (Associate of the Casualty Actuarial Society) designation and the FCAS (Fellow of the Casualty Actuarial Society) ...
Same as term Exclusions: provision in an insurance policy that indicates what is denied coverage. For example, common exclusions are: hazards deemed so catastrophic in nature that they are ...
Coverage usually written as an endorsement to property policies such as the Standard Fire Policy. A loss must be by the intentional acts of vandals. This peril is of particular importance ...
Standard set under the occupational safety and health act that sets allowable levels of worker exposure to such toxic substances as asbestos, certain chemicals, and radiation. In many cases ...
Have a question or comment?
We're here to help.