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
Ocean marine insurance covering one trip. Ocean marine insurance is written either for a specific time period or per trip. A voyage policy is usually written for cargo, whereas a time ...
Provision found in property and liability insurance policies that mandates that the insured notify the insurance company as soon as possible following the occurrence of a covered loss under ...
Percentage of first year's premium paid to compensate an insurance agent. This is known as the "First Years" to show how much new business the agent is generating, compared with renewal ...
Coverage in a separate policy or as an endorsement to the commercial general liability (CGL) form, for liability exposures for an employee who drives a leased car or his or her own ...
Investments restricted to short-term Treasury bills (T-bills) and repurchase agreements secured by Treasury bills. These T-bills are secured by the full faith and credit of the Unites ...
Modified participating level coverage permanent life insurance policy under which the dividends are credited to the policy, thereby reducing the premiums below that usually charged for an ...
Supplementary life insurance reserve required by state regulators when the gross premium is lower than the valuation premium. Some life insurers are able to charge policyholders a premium ...
Coverage for extra expenses associated with the reconstruction of a damaged or destroyed building where zoning requirements mandate more costly construction material. This endorsement is ...
Latin phrase for "The facts speak for themselves." This is a rule of evidence under which an individual is deemed, under certain specific circumstances, to be negligent by the mere ...
Have a question or comment?
We're here to help.