DEFINITION of 'Actuarial Equivalent'

Actuarial equivalent is generally used for applying some measurement to two benefit plans to see if the resulting values are sufficiently close. Often, two or more payment streams of the benefit plans end up having the same present value based on the actuarial assumptions.

For example, actuarial equivalence measurements can be used to compare one specific benefit plan to a standard plan, to see if the plan is comparable in terms of coverage.

BREAKING DOWN 'Actuarial Equivalent'

Actuarial equivalence calculations are done on an average basis, not on an individual basis, and therefore, certain individuals will likely face different out-of-pocket costs under different plans.

RELATED TERMS
  1. Actuary

    A professional dealing with the assessment and management of ...
  2. Actuarial Service

    Method by which corporations determine, assess and plan for the ...
  3. Government Actuary

    An employee of the U.K. government who works for the Government's ...
  4. Actuarial Assumption

    An actuarial assumption is an estimate of an uncertain variable ...
  5. Society of Actuaries (SOA)

    The SOA is a professional organization for actuaries in the U.S., ...
  6. American Academy Of Actuaries - ...

    A group that provides analysis to aid in public policy creation, ...
Related Articles
  1. Personal Finance

    Insure Your Future with a Career as an Actuary

    If you've got excellent math skills, they can add up to a lucrative career as an actuary.
  2. Personal Finance

    Career Advice: Accounting Vs. Actuary

    Read about what life is like as an actuary or as an accountant, how the two careers are different and how to decide which is best for you.
  3. Personal Finance

    A Day In The Life Of An Actuary

    We take a look at the typical workday of three actuaries who work for different types of companies and who are at different stages in their careers.
  4. Financial Advisor

    Retirement Planning for the Self-Employed

    How to select a qualified retirement plan if you are self-employed and have no employees.
  5. Investing

    What are Cash Equivalents?

    Cash equivalents are money market instruments.
  6. Personal Finance

    Top Paying Math-Related Careers

    These jobs require specialized math skills that intimidate most laymen. But, for those with the wit and work ethic to attain this knowledge, there are many high-paying employment options.
  7. Retirement

    An Introduction To The Keogh Retirement Plan

    Learn more about this popular defined-contribution retirement plan that many business owners, proprietors, and self-employed people can benefit from.
  8. Financial Advisor

    Individual vs. Group Health Insurance: What's the Difference?

    The Affordable Care Act requires all Americans to get health insurance through employers or the federal exchange, and differences exist between both channels.
  9. Investing

    Affordable Care Plans: Bronze, Silver, Gold, Platinum?

    How to choose among the different coverage levels in the Health Insurance Marketplace. Which metal makes the most sense for you?
  10. Retirement

    5 Lesser-Known Retirement And Benefit Plans

    These plans aren't widely used, but they fill a specific niche for employees in certain situations.
RELATED FAQS
  1. What's the difference between short-term investments in marketable securities and ...

    Most of the time, when an investor or analyst searches through the financial statements of a publicly traded company, he ... Read Answer >>
  2. Are mutual funds considered cash equivalents?

    Find out why only money market mutual funds are considered cash equivalents, and learn a breakdown of the different types ... Read Answer >>
  3. Where do companies keep their cash?

    If you have ever looked over a company's balance sheet, you have no doubt noticed the first account under the current asset ... Read Answer >>
  4. What caused the European / Eurozone debt crisis?

    Understand how insurance companies price insurance premiums, and learn the importance of data and statistics in the insurance ... Read Answer >>
Hot Definitions
  1. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This ...
  2. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
  3. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  4. Tax Refund

    A tax refund is a refund on taxes paid to an individual or household when the actual tax liability is less than the amount ...
  5. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced within a country's borders in a specific time period, ...
  6. Inflation

    The rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of ...
Trading Center