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Cover duration
Cover Duration is one of the criteria to select a suitable risk cover
The "cover duration" determines the period of time during which the buyer is protected against risk events. Generally, covers are bought for the duration of one month to a year and the price increases as the duration increases.
The "cover duration" is part of the BRIGHT Rating because it impacts the user in three important ways:
  • Risk products where the cover duration is more transparent to the user help create trust in the product
  • Risk products where the cover duration can be set more flexible offer the user more convenience
  • Risk products can use a price curve making the product relatively more/less expensive based on the cover period (e.g. the first 7 days of the cover might be more expesive than the last 7 days of the cover)
Risk platform
Period definition
Nexus Mutual
The user can define the cover period for any number of days in a range from 30 to 365. The cover will start on the day it is bought. The price of the cover scales linearly with the cover period.
Bridge Mutual
The user can define the cover period for any number of weeks in a range from 1 to 52 weeks. The cover period will start on the day it is bought and the expiry date is always on a Thursday. A price-curve is used to ensure a cover with a shorter duration are relatively cheaper than covers with a longer duration.
Cover Protocol
The expiry period is predefined by the protocol and can't be set by the user. The period starts when the cover is bought and the expiry date is generally is 1-3 months in the future.
  • In case the user has need for protection longer another cover needs to be bought in the market once it becomes available.
  • In case the user has no more need for protection before the expiry date, the "claim token" can be sold in the market.
InsurAce
The user can define the cover period for any number of days in a range from 30 to 365. The cover will start on the day it is bought. The price of the cover scales linearly with the cover period.
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