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Valuation Premium

What is 'Valuation Premium'

The rate set by a life insurance company based on the value of the company's policy reserves. The valuation premium is calculated by an insurance company. The company ensures that, first and foremost, it has adequate policy reserves to cover payouts. Once the value of the policy reserves is determined, the insurance company can calculate the valuation premium that will cover its liabilities. In this manner, the insurance company can make sure that it will have the assets necessary to cover all of its policies.

Explaining 'Valuation Premium'

A valuation premium is a life insurance calculation that bases charges for premiums on the company's liabilities. At times, an insurance company may opt to set a premium that is lower than the calculated valuation premium if their experience and statistical records indicate that a lower premium is justified. In the event that a lower premium is charged, the insurance company would be obligated to hold the difference in a deficiency reserve.


Further Reading


IPOs versus acquisitions and the valuation premium puzzle: A theory of exit choice by entrepreneurs and venture capitalists
www.jstor.org [PDF]
… the Financial Intermediation Research Society (FIRS) meetings, the Washington Area Finance Association conference … and "Product Market Competition, IPOs versus Acquisitions, and the Valuation Premium Puzzle: A … Page 2. 1756 Journal of Financial and Quantitative Analysis …

Sustainability and risk premium estimation in property valuation and assessment of worthSustainability and risk premium estimation in property valuation and assessment of worth
www.tandfonline.com [PDF]
… the Financial Intermediation Research Society (FIRS) meetings, the Washington Area Finance Association conference … and "Product Market Competition, IPOs versus Acquisitions, and the Valuation Premium Puzzle: A … Page 2. 1756 Journal of Financial and Quantitative Analysis …

The nature of the foreign listing premium: A cross-country examinationThe nature of the foreign listing premium: A cross-country examination
www.sciencedirect.com [PDF]
… the Financial Intermediation Research Society (FIRS) meetings, the Washington Area Finance Association conference … and "Product Market Competition, IPOs versus Acquisitions, and the Valuation Premium Puzzle: A … Page 2. 1756 Journal of Financial and Quantitative Analysis …

The valuation of FDIC deposit insurance using option-pricing estimatesThe valuation of FDIC deposit insurance using option-pricing estimates
www.jstor.org [PDF]
… the Financial Intermediation Research Society (FIRS) meetings, the Washington Area Finance Association conference … and "Product Market Competition, IPOs versus Acquisitions, and the Valuation Premium Puzzle: A … Page 2. 1756 Journal of Financial and Quantitative Analysis …

The valuation premium of the common stocks of Islamic financial institutionsThe valuation premium of the common stocks of Islamic financial institutions
www.degruyter.com [PDF]
… the Financial Intermediation Research Society (FIRS) meetings, the Washington Area Finance Association conference … and "Product Market Competition, IPOs versus Acquisitions, and the Valuation Premium Puzzle: A … Page 2. 1756 Journal of Financial and Quantitative Analysis …

Willingness to pay for health insurance in a developing economy. A pilot study of the informal sector of Ghana using contingent valuationWillingness to pay for health insurance in a developing economy. A pilot study of the informal sector of Ghana using contingent valuation
www.sciencedirect.com [PDF]
… the Financial Intermediation Research Society (FIRS) meetings, the Washington Area Finance Association conference … and "Product Market Competition, IPOs versus Acquisitions, and the Valuation Premium Puzzle: A … Page 2. 1756 Journal of Financial and Quantitative Analysis …

Valuation of catastrophe reinsurance with catastrophe bondsValuation of catastrophe reinsurance with catastrophe bonds
www.sciencedirect.com [PDF]
… the Financial Intermediation Research Society (FIRS) meetings, the Washington Area Finance Association conference … and "Product Market Competition, IPOs versus Acquisitions, and the Valuation Premium Puzzle: A … Page 2. 1756 Journal of Financial and Quantitative Analysis …

The practice of investment valuation in emerging markets: Evidence from ArgentinaThe practice of investment valuation in emerging markets: Evidence from Argentina
www.sciencedirect.com [PDF]
… the Financial Intermediation Research Society (FIRS) meetings, the Washington Area Finance Association conference … and "Product Market Competition, IPOs versus Acquisitions, and the Valuation Premium Puzzle: A … Page 2. 1756 Journal of Financial and Quantitative Analysis …


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