Core Policy Admin Formulas
The formulas are defined using Business Formulas in Innovation Studio. The current page reveals the logic behind formulas used in the Life and Health module. For more information on how the Business Formulas works, check out the Business Formulas chapter in the Innovation Studio product documentation.
The following formulas and calculations are used in the Core Policy Admin module.
- The additional coverage premium amount = (new annual premium - initial annual premium)/12* No. of uninsured months
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Updated coverage premium amount = Initial premium amount * (12-No of uninsured months)/12 + The additional coverage premium amount
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Additional policy premium amount = Sum (The additional coverage premium amounts)
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Updated policy premium amount = Sum (Updated coverage premium amount)
Daily prorata = 1/365 from the premium amount of a contract.
Monthly prorata = 1/12 from the premium amount of a contract.
If Prorata type = daily
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AdditionalCoveragePremiumAmount = (coverageNewPremium - initialPremiumAmount) / 365 * uninsuredPeriod
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UpdatedCoveragePremiumAmount = initalPremiumAmount * (365 - uninsuredPeriod) / 365
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FreqAdditionalCoveragePremiumAmount = (newPremiumAmount - initialPremiumAmount) / 365 * unisuredPeriod
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FreqUpdatedCoveragePremiumAmount = (initialPremiumAmount * (365- uninsuredPeriod) / 365) + (newPremiumAmount / 365 * uninsuredPeriod)
If Prorata type = monthly
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AdditionalCoveragePremiumAmount = (coverageNewPremium - initialPremiumAmount) / 12 * uninsuredPeriod
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UpdatedCoveragePremiumAmount = initalPremiumAmount * (12 - uninsuredPeriod) / 12
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FreqAdditionalCoveragePremiumAmount = (newPremiumAmount - initialPremiumAmount) / 12 * unisuredPeriod
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FreqUpdatedCoveragePremiumAmount = (initialPremiumAmount * (12 - uninsuredPeriod) / 12) + (newPremiumAmount / 12 * uninsuredPeriod)
The following calculations are used for the premium amounts after a policy MTA is cancelled.
- The additional coverage premium amount = (new annual premium - initial annual premium)/12* No. of uninsured months
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Updated coverage premium amount = Initial premium amount * (12-No of uninsured months)/12 + The additional coverage premium amount
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Additional policy premium amount = Sum (The additional coverage premium amounts)
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Updated policy premium amount = Sum (Updated coverage premium amount)
The parameter contains 2 types of prorata:
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Daily prorata as 1/365 from the premium amount of a contract;
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Monthly prorata as 1/12 from the premium amount of a contract.
Parameter location: Settings - Insurance parameters
Parameter name: Prorata type
Parameter code: PRT
Parameter type and value: Option set: either Daily or Monthly
For the premium adjustments, either the daily pro rata or the monthly pro rata can be chosen.
If Prorata type = daily
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AdditionalCoveragePremiumAmount = (coverageNewPremium - initialPremiumAmount) / 365 * uninsuredPeriod
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UpdatedCoveragePremiumAmount = initalPremiumAmount * (365 - uninsuredPeriod) / 365
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FreqAdditionalCoveragePremiumAmount = (newPremiumAmount - initialPremiumAmount) / 365 * unisuredPeriod
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FreqUpdatedCoveragePremiumAmount = (initialPremiumAmount * (365- uninsuredPeriod) / 365) + (newPremiumAmount / 365 * uninsuredPeriod)
If Prorata type = monthly
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AdditionalCoveragePremiumAmount = (coverageNewPremium - initialPremiumAmount) / 12 * uninsuredPeriod
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UpdatedCoveragePremiumAmount = initalPremiumAmount * (12 - uninsuredPeriod) / 12
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FreqAdditionalCoveragePremiumAmount = (newPremiumAmount - initialPremiumAmount) / 12 * unisuredPeriod
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FreqUpdatedCoveragePremiumAmount = (initialPremiumAmount * (12 - uninsuredPeriod) / 12) + (newPremiumAmount / 12 * uninsuredPeriod)
In the Master Policy entity, the noOfValidityMonths
attribute represents the number of calendar months between the begin date and the end date of the Master Policy. It is calculated as per below:
No of validity months = Master Policy Begin Date - Master Policy End Date
The number of installments of the Master Policy (noOfInstallments
attribute, numeric type) is calculated based on the attributes: number of validity months (calculated above) and payment frequency of the Master Policy.
Payment frequency | No of installments when v>-12 months | 6<=v<12 months | v<6 months |
---|---|---|---|
annually | roundup(v/12;0) | N/A | N/A |
semi-annually |
roundup(v/6;0) |
roundup(v/6;0) | N/A |
quarterly | roundup(v/3;0) | roundup(v/3;0) | roundup(v/3;0) |
monthly | v | v | v |
Where:
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v = The number of validity months of the Master Policy (noOfValidityMonths);
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N/A = The system does not allow this combination.