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
Plan that provides protection in the event of legal actions resulting from charges of harassment, discrimination, wrongful termination of employment, defamation, and invasion of privacy. ...
Program through which employees purchase individual life insurance and disability income insurance by having the employer reduce their income by the required insurance premium. Since the ...
Difference between the rent paid by a lessee as fixed by a lease prior to destruction of property and the rent received by the lessor after that property has been restored. ...
Protection under an insurance policy. In property insurance, coverage lists perils insured against, properties covered, locations covered, individuals insured, and the limits of ...
Insurance company whose domicile is in a state other than the one in which the company is writing business. ...
Process of calculating a premium so that it is adequate-sufficient to pay losses according to expected frequency and severity, thereby safeguarding against the insurance company becoming ...
Coverage for goods during shipment on a common carrier. ...
Authority derived from an agent's contract with an insurance company. ...
Record a debit (or other) agent makes for premiums collected, time period for which the policy is paid, and the week of collection or date the premium was paid. In essence, the debit agent, ...
Have a question or comment?
We're here to help.