Insurance contracts that pay the policyholder dividends over time. Usually paid out annually over the life of the policy, participating policy dividends come from the profits of the insurance company that sold the plan. Most include a final or terminal payment paid out when the contract matures, and some include a guaranteed dividend amount determined … Read more
The net cash a company generates minus its business and investment expense. Generally defined as all revenue less all operating expense. Operating cash flow does not involve items like taxes and insurance payments because they cannot be used to help conduct daily business. This is the most important barometer of a company’s financial health because … Read more
Auto insurance provision, instituted state by state, that allows policyholders to recoup financial losses from their own insurance company following an accident, no matter who was at fault. Under no-fault insurance laws, the insurer pays the insured first-party benefits—but restricts the right to sue for both injury and pain and suffering, to certain conditions and … Read more
The total dollar value of insurance premiums retained by an insurance company. The amount of net premiums written can be calculated using the following formula: Direct (or gross) premiums written + reinsurance assumed – reinsurance ceded = Net premiums written « insurance glossary
The net charge to provide promised insurance benefits when they come due with no provision for expenses. In calculating the net premium, the agent’s commission is deducted from the total amount received before losses are paid. Regarding life insurance, net premium may also refer to the original premium minus the dividends you’re paid or you … Read more
An index which calculates the difference between the costs paid by the policyholder and the monies that would be due if he or she dies at any point in time while the policy is in effect. Basically an earnings table, the net payment cost index is used mainly in calculating death benefits. Using factors such … Read more
Income received from investment assets, such as stocks, bonds, mutual funds and loans, minus related expenses. For insurance companies, net investment income represents the amount of income left after operating expenses are subtracted from total investment income. Net investment income is typically expressed on a per share basis and is calculated pre-tax. To figure the … Read more
Companies owned by policyholders which return part of their profits to those groups as dividends. Insurers use the rest of their profits as a surplus cushion in case of large and unexpected losses. Each policyholder’s share of the profit is based on the amount of business they conduct with their insurer. Dividends are paid on … Read more
Sometimes called “MedPay,” medical payments coverage reimburses the policyholder and others for medical or funeral expenses as a result of bodily injury or death following an accident—regardless of fault. Medical payments insurance may cover expenses like doctor and hospital bills, chiropractic charges, physical therapy and bills for alternative care if you’re hurt in a car … Read more
The percentage of premium dollars your insurer pays out in health insurance claims, as opposed to other expenses like marketing costs, administrative overhead and profit. The higher the medical loss ratio, the more likely you are to pay a higher rate for your health insurance policy. This is because, by paying out more money on … Read more