Risk assessment, also known as underwriting, is the methodology used by insurers to assess the risks associated with an insurance policy. The same helps to calculate the correct premium for an insured person. Description: There are different types of risks associated with insurance, such as changes in mortality rates, morbidity rates, catastrophic risks, etc. This valuation is implicit The practice of deferring expenses incurred to acquire new business during the term of the insurance contract is called deferred acquisition costs. Description: Acquisition costs are direct and indirect variable expenses incurred by an insurer at the time of the sale or purchase of an insurance contract (new and renewable). Fees may take the form of mediation, accidental death of signature and dismemberment is an additional benefit paid to the policyholder in the event of accidental death. The dismemberment benefit is paid if the insured dies or loses his limbs or his sight in the accident. Description: In the event of death, the insured receives the additional amount specified in these benefits in the insurance policy. It is the complementary adverse selections that are a phenomenon in which the insurer is confronted with the probability of damage due to a risk not taken into account at the time of sale. This happens in the event of an asymmetric flow of information between the insurer and the insured.
Description: Adverse selection occurs when the insured intentionally hides certain relevant information from the insurer. Information can be crucial Insurance contracts that do not fall within the realm of life insurance are called general insurance. The different forms of general insurance are fire insurance, marine insurance, automobile insurance, accident insurance and other miscellaneous non-life insurance. Description: Tangible capital assets are susceptible to damage and there is a need to protect the economic value of the assets. For this purpose, general insurance products b A policyholder`s first default is called the first unpaid premium. Description: With each premium payment, a receipt is issued indicating the next due date for the premium payment. If the premium is not paid, this date will become the date of the first unpaid premium. See also: New Business Premium, Performance, Annuity, Insurable Interest, Insurability The integrated value is the sum of the net asset value and present value of a life insurance company`s future profits. Description: This measure only takes into account the future profits of existing companies and ignores the possibility of introducing new policies, so that the profits of these are not taken into account. See also: Insurance, Driver, Annualized Premium, Yield, Beneficiary, Annuity, Insurabl When an insurance company enters into a reinsurance contract with another insurance company, it is called contractual reinsurance. Description: In the case of contractual reinsurance, the company that sells the insurance policies to another insurance company is called a transferring company. Reinsurance frees up the capital of the transferring company and helps to increase the solvency margin.
It also allows for the inclusion of definitions proposed in the Economictimes.com as part of a settlement option, the maturity amount due to a life policyholder is paid in structured periodic installments (up to a certain specified period after maturity) instead of a «lump sum payment». Such payment must be notified in advance to the insurer by the insured. The main purpose of the settlement option is to generate regular revenue streams for indemnification payments insured to one party by the other party for the loss suffered. Description: Compensation is based on a mutual contract between two parties (one insured and the other insurer), in which one promises the other to compensate the loss against payment of premiums. See also: Performance, Annuity, Insurable Interest, Insurability.. .