Portfolio Rate of Return
Definition - What does Portfolio Rate of Return mean?
A portfolio rate of return is the money that has been earned or lost on an investment portfolio over a specific period of time. It is expressed as a percentage.
Many life insurance policies have an investment component. Life insurance investment portfolios can have portfolio rates of return which are positive or negative.
Insuranceopedia explains Portfolio Rate of Return
If a portfolio rate of return is positive, it means that the portfolio has returned a profit. If the portfolio rate of return is negative, then it means that the investment portfolio has lost money.
In addition to providing investment options for their policyholders, many insurance companies invest the money that they make from premiums in order to generate a larger profit. When these investments do well, and when the portfolio rate of return is high, then the insurance company benefits significantly.
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