What is an excessive interest?
In the context of insurance, it describes the excessive interest of a specific type of life insurance. It is the one where the insurance premium is paid by the customer and the amount paid by the insurer when the customer dies is fixed, but the money value of the insurance vary over time. This change is influenced by market conditions and is effectively different in interest, even if the customer must not collect. The exact mechanism of policy of excessive interest depends on the trade structure of the insurer. The insurance date is where the customer pays regular premiums for the period of determining the fixed period and the insurer pays off if the customer dies during this period; If the customer is still alive at the end of the period, the premium payouts stop and the insurer does not pay the payment. The whole life insurance means that the person continues to apply for the rest of his life and the insurer pays off when he dies.
Excessive interest falls into the second category and is based on a specific aspect of the entire life insurance known as the monetary value. This is a payment that ktThe insurer takes place to the customer if he decides to stop paying to this policy. The value of the money value can also be used in other ways: money can be used to finance continuous insurance after a term basis after the customer stops paying or can be used as the basis of a loan to a customer who can be deducted from the final payment related to death if necessary.
The value of the monetary value increases at a time when the customer pays for politics. It is different ways of calculating this growth that distinguish different forms of the whole life policy. The common version, known as the participant or profit, means that the monetary value is increasing with different amounts, with money from the profits of insurance companies. Another version, known as non -participation, the value of the monetary value would be a fixed part or amount every year, which is agreed when the customer first hand over this policy.
The principle of excess interest is a mixture of these two methods. Cash value increases each year by at least a certain amount or afterpart. It may grow by a higher amount depending on the profit of the insurer or other market performance factor, but this is not guaranteed. Any increase in monetary value beyond the guaranteed increase is known as excessive interest, ie the name of the type of policy. Alternative names include the current assumption of lifetime or Sensitive Heated .