Definitions for "Amount at Risk"
See Net Amount At Risk.
The pure insurance element of a life insurance policy. The net amount at risk is equal to the difference between the face value of the policy and its accrued cash value at a given time. The net amount at risk decreases as the cash value increases each year. If the cash value becomes the face value, the policy is said to mature or endow. From the IRS perspective, a corridor of protection or net amount of risk must be apparent in a life insurance policy if the policy is to retain its tax advantaged treatment.
The difference between the face amount of the policy and the reserve or policy value at a given time. In other words, the dollar amount over what the policyowner has contributed of cash value toward payment of his or her own claim. Because the cash value increases every year, the net amount at risk decreases until it finally reaches zero, at which time the cash value or reserve becomes the face amount.
(Montant assuré) This term comprises the amount of insurance effected on any property by a company, irrespective of whether such amount is equal or otherwise to the actual value of the property.