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
Method of underwriting by which one or a group of Lloyd's underwriters write business on behalf of a number of Lloyd's syndicates and other insurance companies. Among the benefits of ...
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Same as term Mortality Table: chart showing rate of death at each age in terms of number of deaths per thousand. ...
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Legal status giving an insurance company all rights to an insured's property. The abandonment clause is usually found in marine insurance and not in other property insurance policies such ...
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