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Terminal Reserve

Terminal Reserve

Definition

(1) A life insurance reserve that is established at the end of each life policy year. (2) The sum that, with additions from all future premium receipts plus investment income, will pay all future maturities under a life insurance policy. (3) The reserve at the end of the policy year, and in the sum sufficient with the net premiums coming due, necessary to provide mortality charges and mature the policy according to its terms, all computed upon a table of mortality adopted and the rate of interest assumed.

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