Yearly Price Of Protection Method
Actuarial procedure used to determine the cost of protection of a cash value life insurance policy on an annual basis. This cost of protection is developed by the following steps:
- Cash value at the beginning of the year plus the premiums paid in for that year are summed up, and the total is multiplied by an assumed interest rate factor of (1+i), resulting in the theoretical end of the year CASH SURRENDER VALUE;
- From the theoretical end of the year cash surrender value, the actual cash surrender value at the end of year and the dividends during that year are subtracted. The resultant figure is the sum allocated for MORTALITY CHARGES for that year;
- The sum allocated for mortality charges for that year is then divided by the AMOUNT OF RISK (face value end of the year cash surrender value) per $1000 of FACE AMOUNT.
Popular Insurance Terms
Wrong against the government or society as a whole. An individual representing the state (usually the district attorney) brings an action on behalf of the state against an individual (s) or ...
Type of livestock insurance that covers for cattle and sheep on the range from October 1 to May 1 in the Western states. Perils insured against are the weather, including freezing; most ...
Voluntary state insurance programs that aid small businesses in acquiring insurance coverages when there are impediments to obtaining the coverage. ...
Federal law passed in 1920 that allows any seaman incurring bodily injury as the result of the performance of one or more functions of the job to bring a suit for damages against the ...
Arrangement whereby the insured pays the insurance company a relatively small monthly premium payment. In exchange for this premium payment, the insurance company processes and pays claims ...
Evaluation of the demographic characteristics of the entire group (such as age, sex, morbidity, mortality), as opposed to the evaluation of individuals in that group. ...
Total value of all goods and services produced by companies located in the United States as well as that produced by United States companies whose production facilities are outside the ...
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 ...
Specialist whose task is to place insurance with the specialized syndicates that underwrite particular risks at Lloyd's of London. ...
Have a question or comment?
We're here to help.