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
Same as term Dynamic: changing state of the economy associated with changes in human wants and desires such that losses or gains occur. Dynamic changes are not insurable. ...
Section of an insurance company that sells through brokers. Some brokerage departments are self-contained in that they have their own underwriting and marketing staffs. Brokerage ...
Same as term American Risk and Insurance Association: membership organization of companies,academics, and individuals in the insurance business whose interest is to further education and ...
Financial analysis method established by the national association of insurance commissioners (naic) to detect problems of property and casualty insurance companies and life and health ...
Factors taken into account concerning the instrument used in funding a pension plan. For example, an allocated funding instrument guarantees that benefits will be paid for all premium ...
Termination of life. A death certificate is required by a life insurance company for a beneficiary to receive the death payment. ...
Maximum amount of insurance coverage that an underwriter will write on a particular class of property or risk exposure. ...
new dividend option under which the policyowner allows the dividends from the participating policy to be applied for the purposes of accumulating cash values. ...
Physical handing of an insurance policy to the insured. Sales training emphasizes the importance of delivery of a policy by the agent. This develops a caring attitude on the part of the ...
Have a question or comment?
We're here to help.