What does Valuation Premium mean? Read on to discover the definition & meaning of the term Valuation Premium - to help you better understand the language used in insurance policies.
A valuation premium, in the context of insurance, refers to the rate an insurance company sets based on its policy reserves and liabilities. After determining the policy reserves are adequate to cover payouts, the insurer calculates a valuation premium that would cover its liabilities. In doing so, the insurance company ensures it has enough assets to cover its policies.
We hope the you have a better understanding of the meaning of Valuation Premium.