Assessment Plan

What Does Assessment Plan Mean?

An assessment plan is a type of insurance policy where the insured may be required to pay an additional premium if losses exceed the premiums collected.

This type of policy is also known as assessable insurance, natural premium insurance, or stipulated premium insurance.

Insuranceopedia Explains Assessment Plan

Assessment plans can be utilized for both life insurance and property insurance products. Under these plans, the insured pays an initial premium to the insurer. However, if the risk increases or the cost of losses exceeds the premium paid, the insurer may require an additional premium payment to cover the shortfall.