Yearly Renewable Term Plan Of Reinsurance
What Does Yearly Renewable Term Plan Of Reinsurance Mean?
A yearly renewable term plan of reinsurance (YRTPR) is a type of proportional reinsurance in which mortality risks are ceded by a primary insurer (ceding company) to a reinsurer. In YRTPR, the net amount at risk is the portion above the primary insurer’s retention limit on a life insurance policy. Reinsurance premiums for the net amount at risk are renewable each 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’s net amount at risk will be shared between them. The ceding company then prepares a schedule outlining the net amount at risk for each policy year. The reinsurer creates a schedule of yearly renewable term premium rates based on the ceding company’s schedule. Each year, the ceding insurer pays the reinsurer the established premiums for the appropriate net amounts at risk. In the event of a claim, the reinsurer remits payment for its assumed portion of the policy’s net amount at risk.
