Life & Health · Chapter 1 · Company Types
Assessment Mutual (Pure & Advance Premium)
Definition
Pure assessment: no premium in advance — members are assessed their share of losses after they occur. Advance premium assessment: premium paid up front; surplus returned as dividends, shortfalls trigger additional assessments.
Exam tip
Neither assessment type has a truly fixed premium.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms