Life Insurance — Term Policy Premium Written
Writing an annual term life policy providing a death benefit with no cash value.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Premium Receivable (Life — Term) | Asset (+) | 600.00 | - |
| Written Premium — Life Term | Revenue (+) | - | 600.00 |
💡 Accountant's Note
Term life is the simplest life product — pure protection with no savings component. The UPR is calculated and deferred. If the insured survives the term, the premium is fully earned with no benefit paid.
Practitioner & Systems Framework
💻 ERP Architecture
Term life premiums are processed through the life policy admin system, with the premium rate determined by the actuarial mortality table and the insured's age, gender, health status, and sum at risk. Annual premiums are written at inception for 12-month term policies. For longer-term renewable policies, each annual renewal generates a new written premium. The life policy system calculates and maintains the UPR (or equivalent IFRS 17 LRC) for each in-force policy.
⚠️ Audit Flags
Auditors confirm that the mortality rate used in pricing is current and based on a recognised actuarial table (e.g., the Jordan national life table or a recognised international table). For IFRS 17 purposes, term life policies are assessed for PAA eligibility — most annual term policies qualify for PAA, simplifying the measurement. Verify that the mortality risk transferred is significant (a condition for IFRS 17 classification as an insurance contract).
📄 Required Documentation
Policy schedule with sum at risk, premium computation showing mortality rate applied, actuarial table used, health declaration (if applicable for the sum at risk threshold), and IFRS 17 contract classification assessment.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.