Perpetual Homeowners Insurance

Perpetual insurance refers to a kind of homeowners insurance policy which is written to have no term or date during the expiry of the policy. The coverage exists for perpetuity right from the date the policy came into effect. The deposit of money by the insurer is called as deposit premium. This deposit is ten times larger than the cost of a non- refundable annual premium for an equivalent policy with a term of one -year.

The insurer also should earn adequate income from the deposits by investing them to cover losses and operating expenses for economically more viable. As for as cancellation is concerned, the insured is allowed to get a complete refund of the initial deposit premium which is usually without interest.

Perpetual insurance was first issued in the U.S in Philadelphia in the year 1752 and is still functional in fire and home owner's insurance. There are few companies in U.S that offer perpetual insurance. Companies like Baltimore equitable, the contributionship companies, mutual assurance society of VA are the most famous companies.

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