Valuation Period
Candlefocus EditorThe start of the valuation period is when the premiums began. It typically takes a year or two for the previous year’s annual premiums to be reflected in the vested value, and during this time, financial markets or other global events could affect the performance of the investments. At the end of the valuation period, the policy will show its current vesting value.
For the policy holders, the point of the valuation period is to determine if their investments are conducive to their individual financial goals and assets. Life insurance and annuities holders can use valuation periods as an opportunity to review their current policies and make changes, such as where their money is invested and how much is being paid in premiums. During the valuation period, policy holders can also use the results to regulate premiums in order to reach the desired maturity values.
The life insurance and annuities valuation period is absolutely critical to the stability of those investments. By using the valuation period to assess the vested values of their policies, policy holders can ensure that their investments remain secure and up-to-date for the amount of time through which the policies are active. All of these facets culminate in a precise understanding of the present value of the insurance or annuity and how comfortable policy holders are with how their money is managed.