Definition
Asset Depreciation Risk
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The asset depreciation risk is one of 4 key components that insurers use to assess the risk level of life insurance policies.
Among the variables that make up asset depreciation risk are defaults on:
- Mortgages
- Interest payments
- Real estate
- etc
The level of risk determined would affect the premium of such policies.
This is why insurance premiums for the same amount of coverage would be priced differently today than compared to 10 years ago. Because the risks has increased.
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