Aleatory Contract
Definition of "Aleatory contract"
Contract that may or may not provide more in benefits than premiums paid. For example, with only one premium payment on a property policy an insured can receive hundreds of thousands of dollars should the protected entity be destroyed. On the other hand, an insurance company can collect more in premiums than it ever pays out in benefits, as in a fire insurance policy under which the protected property is either damaged or destroyed. Most insurance contracts are aleatory in nature.
Popular Insurance Terms
Claim against property for payment of taxes. Life insurance proceeds and annuity benefits are protected against certain creditors of the insured, but the federal government is not one of ...
Insured's income prior to the disability minus the insured's income after the disability. ...
Termination of coverage in insurance. ...
Accounting procedures that defer the full funding of a life insurance net level premium reserve to accommodate the policy acquisition cost in the early years of a policy. First-year policy ...
Investment risk associated with the relationship between the yield (interest, dividends, and capital) of financial instruments and the rate of inflation in the economy. For fixed income ...
Insurance coverage that protects the exporter (even though the exporter may be in total compliance with the terms and conditions of the contract) in the event a foreign government calls the ...
To transfer a risk from an insurance company to a reinsurance company. ...
Rule that concerns the distribution of the aggregate surplus among the policies in the same proportion as each respective policy has contributed to the surplus. ...
Same as term Blanket Position Bond: covers all employees of a business on a blanket basis with the maximumlimit of coverage applied separately to each employee guilty of a crime. ...
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