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
Enacted on April 1, 1997; provides protection against creditors for irrevocable trusts provided that the trust has a grantor who is a discretionary beneficiary. In order for the statute of ...
Contract providing whole life insurance on the father and term insurance on the mother and all children, including newborns after reaching a stated age, usually 15 days. Children, upon ...
Mutual insurance association that issues insurance to its members on a nonprofit basis. Examples of such associations include fraternal societies, unions, and employee membership groups. ...
Procedure used to compare the costs of life insurance policies by having equal death benefits of the policies held constant and accumulating the differences in the premiums paid among the ...
Individual or organization that is a potential purchaser of an insurance product. ...
Authority of the pension benefit guaranty corporation (pbgc) to stop the termination of a pension plan and restore it to its previous status by returning a portion or all of the plan's ...
To sell a specific amount of insurance. ...
Same as term Contract Holder: in insurance, individual with rightful possession of an insurance policy, usually the policyowner. ...
New rule entitled "Accounting and Reporting for Reinsurance of Short-duration and Long-duration Contracts," which requires the insurance company to report all assets and liabilities ...
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