What Does Yearly Renewable Term Plan Of Reinsurance Mean?
A yearly renewable term plan of reinsurance is a type of proportional reinsurance under which mortality risks are ceded by a primary insurer (ceding company) to a reinsurer. InYRTPR, the net amount at risk for the amount above the primary insurer’s retention limit on a life insurance policy. Reinsurance premiums for the net amount at risk are renewable every year under the renewable term plan of reinsurance.
Insuranceopedia Explains Yearly Renewable Term Plan Of Reinsurance
In the reinsurance agreement, the ceding company and the reinsurer agree on how the policy net amount at risk will be shared between them. The ceding company then prepares a schedule of the net amount at risk for each policy year. The reinsurer develops a schedule of yearly renewable term premium rates for reinsurance on the ceding company’s schedule. The ceding insurer will then pay the reinsurer the established premiums for the appropriate net amounts at risk each year. In the occurence of a claim, the reinsurer would remit payment for the assumed portion of the policy’s net amount at risk.