One factor used when calculating life insurance reserves. The formula is the accumulated cost of insurance equals the net single premium paid at the end of the term of coverage by the surviving insureds to give death benefits on the insureds who died during the term.
Insurance Encyclopedia
Accumulated dividends
Accrued funds payable to policy owners but left with life insurance company to build up and earn interest.
Accumulated funding deficiency
Amount by which a qualified pension plan fails to meet the minimum funding legal standards. A plan with an accumulated funding deficiency is subject to a penalty tax and enforcement provisions. Also called funding deficiency.
Accumulated value
Amount of money invested plus the interest earned.
Accumulation
1. The accumulation risk arises when a large number of individual risks are so situated, e.g. within a given location, that a single occurrence, such as a windstorm, may affect many or all of these risks. The occurrence may be defined in an hours clause. See ACCUMULATION CONTROL. 2. Life insurance term to reflect the increase in value and therefore subsequent benefits available under with profits policies as the life of the policy progresses and investment income accrues.
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US, MEDICAL: 1. Percentage added to insurance benefits given as a reward or incentive to the insured because of continuous renewal of the policy. This may be added as a provision in some health insurance policies. 2. Total number of services used by a patient under an insurance plan that limits costs or office visits.
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The concentration of similar risks in a particular area such that an insured event may result in several losses occurring at the same time.*******Percentage addition to Policy benefits as a reward to the insured for continuous renewal.
Accumulation at interest
Option under which a life insurance policy dividends are retained on deposit with the insurer to accrue interest. Also called accumulation option.
Accumulation Control
The monitoring of any actual or potential accumulation of risk (e.g. number of properties in a locality exposed to the same loss event, e.g. flood) in order to ensure that underwriting capacity is not exceeded and/or adequate reinsurance or suitable co-insurance is arranged.
Accumulation factor Life
insurance term referring to the accumulation of a single premium of 1 over a period of time taking account of the interest the premium will earn and the probability of the insured surviving.
Accumulation in risk
A combination of hazardous risk factors affecting an insured risk, e.g. poorly constructed building, hazardous trade or poor claims experience.
Accumulation option
See: accumulation at interest.