Business, Legal & Accounting Glossary
These sorts of policies operate on a ‘with-profits’ basis and often in conjunction with repayment of a loan or mortgage. If the policyholder dies during the term, a guaranteed death benefit repays the loan.
However, to guarantee to pay the entire loan at maturity would incur very high premiums. Accordingly, a policy with lower premiums guarantees to repay only a proportion of the loan amount at maturity (the basic sum assured). The expectancy then is that the balance will be repaid out of reversionary and (possibly) terminal bonuses.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Basic Sum Assured are sourced/syndicated and enhanced from:
This glossary post was last updated: 26th April, 2020 | 3 Views.