Adjusted Premium

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Dictionary Says

Definition of 'Adjusted Premium'

An adjusted premium is the premium of a life insurance policy that is adjusted by amortizing the costs associated with acquiring the insurance policy. The adjusted premium is equal to the net-level premium plus an adjustment, to reflect the cost associated with the first year initial acquisition expenses.

The adjustment to the net-level premium is an amortization of the expenses associated with establishing the initial insurance policy. The net-level premium is the total cost of the policy (from inception to payout), divided by the number of years the policy is expected to be in force. This term is specific to life insurance companies.
Investopedia Says

Investopedia explains 'Adjusted Premium'

The adjusted premium is important for life insurance companies to calculate, as it is the premium used to figure the minimum cash surrender value (CSV). All life insurance policies are required to calculate a CSV due to the Nonforfeiture Provision, which means that the life insurance policy always has a value, even when the policy holder chooses not to use it for its original purpose (payout upon death).

The CSV is the value that could be received by terminating the policy and choosing to "cash-out." The insured is entitled to other choices under the provision, including taking a loan against the policy using the cash value as collateral.
Search results for

'Adjusted Premium'

  • Premium Bonds: Problems And Opportunities

    http://www.investopedia.com/articles/bonds/11/premium-bonds-pros-cons.asp
    ... Step 3: Determine the amount of premium to amortize for the given accrual period.
    To determine this value you need to multiply your adjusted acquisition price ...

  • Calculating The Equity Risk Premium

    http://www.investopedia.com/articles/04/020404.asp
    ... We expect the inflation-adjusted yield on the regular 10-year Treasury (violet)
    to ... returns from stock returns, we get an estimated equity risk premium of +1.5 ...

  • Coca-Cola Still Priced For Premium Performance

    http://stocks.investopedia.com/stock-analysis/2012/Coca-Cola-Still-Priced-For-Premium-Performance-KO-PEP-KFT-MNST0209.aspx
    ... Coca-Cola Still Priced For Premium Performance. Posted: Feb 09 ... in China.
    Adjusted profitability was likewise sound and solid. Gross ...

  • Can Real Estate Stabilize Your Portfolio?

    http://www.investopedia.com/articles/mortgages-real-estate/09/real-estate-portfolio.asp
    ... A basic and systematically used measure of the risk-adjusted superiority of ... the Sharpe
    ratio is calculated by dividing the investment risk premium for a given ...

  • Series 65 Study Guide - Portfolio Risks and Returns - Measuring ...

    http://www.investopedia.com/exam-guide/series-65/portfolio-risks-returns/measuring-portfolio-returns.asp
    ... Risk premium - the risk premium is the higher return that is expected for ... Treasury
    bills is typically used in calculations, such as risk-adjusted return and ...

  • Tax Deductions You May Be Missing

    http://www.investopedia.com/articles/tax/09/personal-business-tax-tips.asp
    ... policy benefits will not be taxable if you do not deduct the premium, and some ... medical
    expenses are only deductible if they exceed 7.5% of adjusted gross income ...

  • Projected Returns: Honing The Craft

    http://www.investopedia.com/articles/05/020805.asp
    ... 1980s (see Jeremy Siegel's “The Long-Run Equity Risk Premium,” CFA Institute ... pressure
    to justify their rich stock valuations, they adjusted the definition ...

  • How To Value A Real Estate Investment Property

    http://www.investopedia.com/articles/mortgages-real-estate/11/valuing-real-estate.asp
    ... premium accounts for net land appreciation, while the risk premium reveals the ... stream
    by the appropriate required rate of return, adjusted for dividend growth. ...

  • Intro To Insurance: Types Of Life Insurance | Investopedia

    http://www.investopedia.com/university/insurance/insurance8.asp
    ... Universal Life Universal life insurance, also known as flexible premium or adjustable
    life ... cash values and level amount of protection can each be adjusted up or ...

  • Should Your Options Go Naked?

    http://www.investopedia.com/articles/optioninvestor/05/010505.asp
    ... than half of what we would need to hold the adjusted naked strangles ... The return on
    margin was 6.3% [premium collected / increased initial margin = $7,350 / $115 ...

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