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Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
38% - Moderately

Validation Period

Synonyms:break-even period, remuneration time
Filed Under: insurance
Tags: insurance

Definition of validation period

validation period
1. The length of time passed before the premiums on an insurance policy cover the all expenses incurred in underwriting the policy, or more simply, the length of time that must pass before an insurance policy begins to turn a profit for the insurer. Also known as the "break-even period."

Related Terms and Acronyms:

  • break-even point (BEP)   The point at which expenses meet income or savings. In home finance, the break-even point often refers to the time it takes to recoup the costs of refinancing a loan or paying discount points.
  • earned premium (EP)   The amount of premiums that an insurer has collected from an insurance policy at a given time.
  • net premium   The total earned by an insurer in insurance premiums, less the agent's commissions.
  • policy declarations   The section of the insurance policy that declares the specifics of the insurance policy including premiums, named perils, and policy limits, amongst others.

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