Amount At Risk
- difference between the face value of a permanent life insurance policy and its accrued cash value. The pure cost of protection is based on this difference. For example, if the face value of a lifeinsurance policy is $100,000 and the cash value is $80,000 then the net amount at risk is $20,000. From the Internal Revenue Service perspective, a corridor of protection or net amount of risk must beapparent in a life insurance policy if the policy is to retain its tax advantaged treatment.
- in property and liability insurance, the lesser of the policy limit or the maximum possible loss to the insured.
Popular Insurance Terms
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Statutory accounting principles (SAP), as listed in the insurance company's annual financial statements filed with the insurance commissioner of each state in which it is licensed. Income ...
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Provision applied as a rider attached to an ordinary life insurance policy for the purpose of meeting estate planning requirements. When the insured dies, the beneficiary is entitled to ...
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