An indeterminate premium policy typically implies what?

An indeterminate premium policy is designed to provide flexibility in premium payments based on the insurance company's performance. This means that the policyholder initially pays a lower premium, which can be adjusted in the future depending on how well the insurer performs financially. Such policies are typically associated with whole life insurance products where the premium may be subject to change; thus, the premium can increase or decrease based on the company's investment returns or other financial metrics.

This approach allows policyholders some financial comfort at the outset, as they are not burdened by high initial payments. However, it does come with the understanding that future premiums may rise if the company's performance warrants it. Therefore, the characteristics of an indeterminate premium policy directly align with the idea of a low initial premium that can adjust as the insurer's financial situation changes.