Interpolated Terminal Reserve Law and Legal Definition

Interpolated terminal reserve refers to the method by which the reserve on any life insurance policy between anniversaries are determined by valuing insurance policies for gift and death tax purposes, regardless of whether the policies are not paid at the time of their transfer. It is determined by making pro rata adjustment upward between the previous terminal reserve and the next terminal reserve. In case of certain term policies of long duration it is determined by making pro rata adjustment downward.