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Embedded Value
See Also3. What are the usual "exclusion clauses" in an insurance policy?Agents Should Know Common Exclusions in Their E&O PoliciesWhat are general exclusions?Home insurance exclusions: What your policy doesn’t coverEmbedded value is the sum of the net asset value and present value of future profits of a life insurance company.
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Expense Loading
Expense loading is the amount included in the premium charged by an insurance company to cover its administrative and maintenance costs.
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Definition: Exclusions are the cases for which the insurance company does not provide coverage. These are the conditions excluded from the insured event to avoid losses to the company.
Description: Life insurance contracts have certain specified provisions and clauses which have to be fulfilled so that the claim can be considered valid. Generally, the insurance provider is liable to pay the claim amount in case of death of the insured. But to avoid situations of adverse selection, the insurance companies will not consider provision of benefits for specific conditions like committing of suicide by the insured person.
Such clauses have to be clearly stated in the policy document at the time of commencement of the contract for the information of the policyholder. Waiting period in which the insurance benefits do not apply is also a type of exclusion.
Also See: Insurance, Annualized Premium, Return, Beneficiary, Annuity, Insurable Interest, Insurability, Claim Amount
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Embedded Value
Embedded value is the sum of the net asset value and present value of future profits of a life insurance company.
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- NEXT DEFINITION
Expense Loading
Expense loading is the amount included in the premium charged by an insurance company to cover its administrative and maintenance costs.
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Related Definitions
- 3rd Party Insurance: Motor third-party insurance or third-party liability cover, which is sometimes also referred to as the 'act only' cover, is a statutory requirement under the Motor Vehicles Act.It is referred to as a 'third-party' cover since the beneficiary of the policy is someone other than the two parties involved in the contract (the car owner and the insurance company). The policy does not provide any Absolute AssignmentAn absolute assignment is the act of complete transfer of the ownership (all rights, benefits and liabilities) of the policy completely to other party without any terms and condition.Description: Absolute assignment shifts the ownership of the insurance policy.For instance, a policy owner X wants to gift his life insurance policy to another person named Y. Hence X is doing absolute assignment.Accidental Death Benefit And DismembermentAccidental death benefit and dismemberment is an additional benefit paid to the policyholder in the event of his death due to an accident. Dismemberment benefit is paid if the insured dies or loses his limbs or sight in the accident.Description: In an event of death, the insured person gets the additional amount mentioned under these benefits in the insurance policy. These are the supplementary Actual Cash ValueA valuation of the damaged property, i.e. its monetary worth at market value immediately preceding the occurrence of the loss, is called actual cash value of the property. It gives the estimate of the cost of replacement or repair of the damaged asset.Description: To ascertain the exact extent of loss, the insurance company undertakes an evaluation of the property before and after the loss occur
- Actuarial ScienceActuarial Science is a discipline that deals with assessing the risks in insurance and finance field using various mathematical and statistical method.Description: The professionals who carry out these tasks of ascertaining, analyzing and providing solutions of future uncertainties having financial risks are the actuaries. Mathematics of probability and statistics are the major tools they use toActuariesA person with expertise in the fields of economics, statistics and mathematics, who helps in risk assessment and estimation of premiums etc for an insurance business, is called an actuary.Description: Insurance business requires advanced statistical and analytical skills for evaluation of risks and returns associated with each proposal. Insurance companies employ these experts from the field of Adverse SelectionAdverse selection is a phenomenon wherein the insurer is confronted with the probability of loss due to risk not factored in at the time of sale. This occurs in the event of an asymmetrical flow of information between the insurer and the insured.Description: Adverse selection occurs when the insured deliberately hides certain pertinent information from the insurer. The information may be of critAgentAn agent is a person who represents an insurance firm and sells insurance policies on its behalf.Description: Generally, there are two types of such agents who reach the prospective parties that may be interested in buying insurance. These are independent agents and captive or exclusive agents.Independent agents may represent many insurance firms and receive commission for their services a
- Annualized PremiumThe total amount of premium paid annually is called the annualized premium.Description: Any insurance policy comes up with many premium payment options. Premium can be paid monthly, quarterly, semi annually and annually.For instance, if the monthly premium is Rs 2000, then the annualised premium will be 2000*12 = Rs 24000Also See: Insurance, Concealment, BancassuranceAnnualized Premium EquivalentAnnualized premium equivalent (APE) is a common measure of ascertaining the business sales in the life insurance industry. It is the sum of the regular annualized premium from the new business plus 10% of the first single premium in a given period.Description: APE is computed as:APE = Annualized regular premium + 10 % of single premium (Including top-up premium). Where annualized regular pre
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