What is a Valuation Reserve?
The so-called cash value refers to the value of a life insurance policy with a saving nature. The insurer usually deposits a liability reserve for the performance of contractual obligations. If you surrender the insurance part way through, the liability reserve of the policy is used as a refund for termination of payment.
Policy value reserve
Right!
- Chinese name
- Policy value reserve
- Definition
- The value of a life insurance policy
- Authentic
- Cash value of the policy
- When surrendering
- Refund a sum of cash according to the cash value table
- The so-called cash value refers to the value of a life insurance policy with a saving nature. The insurer usually deposits a liability reserve for the performance of contractual obligations. If you surrender the insurance part way through, the liability reserve of the policy is used as a refund for termination of payment.
- The policy value reserve is the cash value of the policy.
- Policy cash value
- We know that as people get older, mortality rates rise. Therefore, the insurance premiums you pay to insurance companies should increase with age. In order to consider that elderly people may lose income due to physical strength decline when they need protection more, and cannot pay insurance premiums, insurance companies generally adopt a scientific method of balanced premiums to distribute the insurance premiums payable throughout the payment period "evenly" Throughout the payment period, there is a fixed standard for insurance premiums paid each year, which will not increase with age. When you are younger, you pay more, and when you are older, you pay less. I pay as much every year. Therefore, after the insurance policy takes effect, the "overpaid" premiums are "deposited" on the insurance policy. The "deposited" premium is the cash value of the life insurance policy. It is mainly to ensure that insurance companies fulfill their future payment obligations.
- Therefore, when surrendering the insurance, the insurance company will return a sum of cash according to the cash value table. However, in the first two years of purchasing an insurance policy, the insurance company has a large expenditure on various management expenses such as underwriting system, settlement agent fees, employee wages. Insurance premiums will be minimal. Even if the policy is withdrawn in the future, although the cash value of the policy will increase with the payment period, it cannot be higher than the premium paid by the insurance company. Back and forth are your own money. Therefore, once you have purchased insurance and have protection, it is best not to give up the protection if you have no choice. Otherwise, there will be a certain economic loss.