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Cost basis is key to understanding your tax obligations.
The impact is thus an immediate hit to solvency and profitability when a policy is written, followed by surpluses in later years that pay this back. New Business Strain is artificial in that it is a function of how a regulatory body, for example, might look at a life insurer's financial position.
Zillmerisation relates to the valuation of a life insurance company by an actuary. When new regular premium protection business (such as life or critical illness insurance ) is written, the value of the company may reduce (when viewed on a regulatory basis) even if the business is likely to be profitable.
In the insurance industry, gross premiums written is the sum of both direct premiums written (see next paragraph) and assumed premiums written, before deducting ceded reinsurance. Direct premiums written represents the premiums on all policies the company's insurance subsidiaries have issued during the year.
The cost basis of an asset is important to you for two primary reasons – tax planning and investment planning. These two reasons are related because only with the proper investment planning can ...
The cost basis for stocks and mutual funds is generally the price you paid when you purchased the asset, plus any other trading costs. However, there are several methods to calculate cost basis ...
Hence, certain costs which are incurred to acquire insurance contracts should not be recognized as an expense in the accounting period in which they are incurred but should be capitalized as an asset on the balance sheet and gradually amortized over the lifetime of the insurance contracts. Such costs are called deferred acquisition expenses ...
The least expensive type of life insurance is usually term life insurance. It provides coverage for a specific period — often 10, 20 or 30 years — and is typically much cheaper than permanent ...