Deposit premium
Encyclopedia
A deposit premium is a type of insurance
premium where the insured deposits money with the insurer to obtain perpetual insurance
against the risk
of a loss. Deposit premiums are unique from regular insurance premiums, because they are refundable should either the insured or the insurer chose to terminate the perpetual insurance.
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
premium where the insured deposits money with the insurer to obtain perpetual insurance
Perpetual Insurance
Perpetual insurance is a type of homeowners insurance policy written to have no term, or date, when the policy expires. From the effective start date, the coverage exists for perpetuity. The insured deposits money, called a deposit premium, with the insurer for insurance for the life of the risk...
against the risk
Risk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...
of a loss. Deposit premiums are unique from regular insurance premiums, because they are refundable should either the insured or the insurer chose to terminate the perpetual insurance.