1. Death compensation refers to the surplus generated when the actual risk occurrence rate of the insurance company is lower than the expected risk occurrence rate, that is, the actual number of deaths is less than the expected number of deaths;
2. The spread refers to the surplus generated when the actual investment income of the insurance company is higher than the expected investment income;
3. Expense difference refers to the surplus generated when the actual operating and management expenses of the insurance company are lower than the expected operating and management expenses.
Extended data
When the actual return on investment is greater than the predetermined interest rate, the surplus part is called spread. The insured spread refers to the difference between the fixed payable rate of return determined by life insurance according to the insurance clauses and the actual payment rate of the insurance company. Generally appear in dividend insurance, investment-linked insurance, universal life insurance and other businesses.
Because insurance companies should consider three factors when determining the rate: the predetermined mortality rate, the predetermined return on investment and the predetermined operating and management expenses, once the rate is determined, it cannot be changed at will.
Life insurance policies often last for decades. In such a long time, the actual situation may be different from the expected situation. Once the actual situation is better than expected, the above difference will occur, and the insurance company will distribute the profits generated by this difference to customers in a certain proportion, which is the source of dividends.
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