Investments
Definition of "Investments"
Money expended with the object of profit. The goal of an insurance company is to invest in assets with a rate of return greater than that to be paid out as benefits under its policies. Traditionally, life insurance companies have invested in long-term financial instruments such as mortgages. Today, under current assumption life insurance policies, investments are in short-term financial instruments. Property and casualty insurance companies, because of the nature of their policies, favor short-term financial instruments as investments.
Popular Insurance Terms
Same as term Excess of Loss Reinsurance: method whereby an insurer pays the amount of each claim for each risk up to a limit determined in advance and the reinsurer pays the amount of the ...
Coverage for automobiles used by a business when a liability judgment arises out of the use of the automobile, or the automobile is subject to damage or destruction. The business can select ...
Agency formed as the result of bank failures in the 1930s to insure the deposits of customers of member banks. The FDIC, an agency of the federal government, is self-supporting in that it ...
Exceptions to coverage. There is no obligation for an insurance company to pay a claim if: the loss is not covered by a policy, or a particular person is not included in the definition of ...
Term life insurance, usually purchased at an airport by an airplane passenger. It provides a death payment to the passenger's beneficiary in the event of a fatal accident on one or more ...
Arrangement in health insurance to discourage multiple payment for the same claim under two or more policies. When two or more group health insurance plans cover the insured and dependents, ...
Means used by a direct fire underwriter to protect against accumulation for a fire account, as well as against extremely large fire account liability. For example, heavy liabilities under ...
Allocation of monetary resources to equities. ...
Technique of risk management. It ensures that an individual or business does not incur any liability relating to a given activity by avoiding the activity in question. For example, a ...
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