Definition - What does Assessment Plan mean?
An assessment plan is a type of insurance policy for which the insured may be asked to pay an additional premium if the loss exceeds the premiums collected.
It is also called assessable insurance, natural premium insurance, and stipulated premium insurance.
Insuranceopedia explains Assessment Plan
Assessment plans can be used for life insurance and property insurance products. With these kinds of plans, the insured pays the insurer a premium up front. However, if the risk increases the cost of the loss exceeds the amount of the premium paid, the insurer will require an additional premium payment to make up for this.
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