The premiums under these policies usually increase in cost each year Annuity

The premiums under these policies usually increase in

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The premiums under these policies usually increase in cost each year. Annuity. There are many types of annuities but, basically, they are a contract between the investor and an insurance company under which the investor makes a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to the investor beginning immediately or at some future date, with the payments continuing for a set period or until the death of the annuitant. They may include a terminal death benefit that will pay the investor’s beneficiary a guaranteed minimum amount, such as total purchase payments. Claim.* Request for payment from the insurance company by the insured as a result of an insured event occurring. In life insurance, survivors submit a claim when the insured dies. The insurance company investigates the claim and pays the appropriate amount if the claim is found to be legitimate, or denies the claim if it determines the loss was fraudulent or not covered by the policy. Endowment policy. These policies have features similar to those of a whole of life policy but the sum insured is payable upon the survival of the insured life to a certain age or date, or upon prior death. Expected death strain (EDS). Expected level of claims against a life insurer as calculated by an actuary. Fair dividend rate (FDR).* From 1 April 2007 it is the general method for determining foreign investment fund income with respect to less than 10% interests in foreign companies other than some listed Australian companies. It is generally a deemed return of 5% of the market value of the shares held by the taxpayer on the first day of the income year. Natural persons have the option of using the actual return but not a loss. Group life. A single life insurance policy under which individuals in a group – for example, employees and their dependents – are covered. Incurred but not reported (IBNR). Losses occurring over a specified period that have not been reported to the insurer. International Financial Reporting Standard (IFRS) 4. A financial accounting standard that applies to virtually all insurance contracts (including reinsurance contracts) that an entity issues and to reinsurance contracts that it holds. KiwiSaver.* A work-based voluntary savings initiative set up by the government to help New Zealanders save for their retirement. Level premium term insurance (sometimes referred to as level term insurance ). Term insurance that provides consistent coverage over a specified amount of time for a guaranteed level premium cost. The face value of a level term policy usually remains the same for the duration of the period selected. The premium is usually constant over the term of the policy. Level term coverage usually lasts for 10, 15, or 20 years. The product does not usually build cash value.
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