Age stated in a pension plan that is before the normal retirement age but allows the plan participant to receive pension benefit. However, benefits received early are reduced from the amount that would have been received at normal retirement age.
Insurance Encyclopedia
Early termination insurance
A derivative of guaranteed asset protection, it covers the monetary shortfall that may arise when a car purchase finance agreement is terminated due to death or a change in the debtor’s employment status through resignation, unemployment or pregnancy, or due to the vehicle being written off or stolen.
Early warning system
A system of measuring insurers’ financial stability set up by insurance industry regulators. An example is the Insurance Regulatory Information System (IRIS), which uses financial ratios to identify insurers in need of regulatory attention.
Earmarked money purchase schemes
A collection of individual arrangements under a single trust. Each member’s fund is held under a separate earmarked insurance policy and no other investments are allowed in this scheme.
Earmarked policy
See: Earmarked Money Purchase Schemes.
Earmarking
A court order compelling a pension scheme to earmark some or all of a member’s pension scheme benefits for payment to an ex-spouse. As earmarking leaves the couple financially linked until retirement it has been superseded by pension sharing.
Earned Income
US: Employment income derived from salary, wages, commissions, or fees.
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MEDICAL,USA: Money derived from personal services (i.e., salary, wages, commissions, or fees).
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The money a person earns from working at a job.
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The money individuals earn as a result of working at some job or occupation for which they are paid a salary.
Earned Premium
REINSURANCE: (01) That part of the premium applicable to the expired part of the policy period, including the short-rate premium on cancellation, the entire premium on the amount of loss paid under some contracts, and the entire premium on the contract on the expiration of the policy. (02) That portion of the reinsurance premium calculated on a monthly, quarterly or annual basis which is to be retained by the reinsurer should there cession be cancelled. (03) When a premium is paid in advance for a certain time, the company is said to “earn” the premium as the time advances. For example, a policy written for three years and paid for in advance would be one-third “earned” at the end of the first year.
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Insurance companies often require that premiums be paid in advance for the full policy term. However, the premium is “earned” at an even rate for the term of the policy and that portion that is “unearned” remains in a reserve in case the insured cancels the policy and is entitled to some of the money in return.For example, suppose the premium for Susie’s homeowners policy is $ 1,200 per year and she pays it on the effective date of the policy. On that date, the entire $1,200 is unearned and goes into the unearned premium reserve. The policy “earns” $100 per month and that amount is transferred from the unearned premium reserve to the company’s general account (although some is placed in the loss reserves). If Susie decides to cancel at 6 months, there is $600 in the reserve fund to send her a refund of the unearned premium. This example is a very simplistic, but is a basic outline of the process. (See Reserves; Unearned Premium).
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Portion of a premium for which protection has already been provided by the insurer.
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Premium for which protection has been provided. When a premium is paid in advance for a policy period, the company “earns” a portion of that premium only as time elapses during that period.
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UK: that part of an insurance premium receivable which is attributable to the period of cover which has already gone by.
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US: That portion of a policy’s premium that applies to the expired portion of the policy. Although insurance premiums are often paid in advance, insurers typically “earn” the premium at an even rate throughout the policy term. The unearned portion of the premium that has been paid is kept in the “unearned premium reserve.”
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The portion of a premium exhausted during the policy’s term.
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UK: The proportion of premium related to the period of insurance that has already run.
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The proportion of premium that relates to a used period of cover.
Earned premiums
Portion of a premium that pays for the protection that the insurance company has already provided on a policy; the expired part of the policy period.
Earned Reinsurance Premium
A reinsurance term that refers to either 1) that part of the reinsurance premium applicable to the expired portion of the policies reinsured, or 2) that portion of the reinsurance premium which is deemed earned under the reinsurance contract.