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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Basis for calculating life insurance premiums and benefits using current interest and mortality rates, rather than historic rates. Current assumptions are critical to interest-sensitive ...
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Reinsurance ceded to an insurance company that is a non admitted insurer. ...
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Employer, association, labor union, or other group ...
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Organization that develops and administers educational materials and examinations for the life insurance industry. It awards the fellow, life management institute (FLMI) designation to ...
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