Valuation Period
What Does Valuation Period Mean?
A valuation period is the time frame during which unit values are determined for variable investment options at the close of each business day. In the context of insurance, valuation periods are important for investment-based products, such as certain life insurance policies and annuities, as they help establish the value of the investment portion of the policy or annuity.
Insuranceopedia Explains Valuation Period
Some life insurance policies include investment vehicles, and with variable annuities, the insurer invests on behalf of the policyholder using the sums from premium payments. The value and payout of these policies depend on the performance of the chosen investment options; however, growth is not guaranteed, and the policyholder’s returns may fluctuate based on market conditions.
