Valuation Reserve

Valuation Reserve
Valuation Reserve

An amount of money an insurance company holds in reserve against a life insurance policy in case assets or investments prove insufficient or a liability requires more funds than expected.

The amount of valuation reserve is determined by the age and sex of the insured person, how long the policy in question has been in force, the interest rate used in calculations, and the likelihood that the insured will die during the policy’s term.

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