Adverse Financial Selection
Process in which the policy-holder surrenders the policy when:
- cash proceeds can be invested elsewhere at a higher return than that being earned on the cash value within the policy;
- economic recession or depression exists and the cash is required to meet other financial obligations. If the policy-holder exercises the CASH SURRENDER VALUE option during these economic circumstances, the company may have to sell assets at a "fire sale" and will have fewer funds to invest at advantageous rates of return.
Popular Insurance Terms
Person who has been authorized by the insurance company to pay a loss (s) incurred by the insured. ...
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Section describing coverages under a policy. Elsewhere in the policy other sections may restrict or exclude coverages. ...
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