Life Insurance Cost
Amount paid to an insurer. Determination of the actual cost (not the price paid) of a life insurance policy has been widely discussed for many years in life insurance and consumer circles. The traditional or net cost method (that adds a policy's premiums, and subtracts dividends, if any, and cash value) does not consider the time value of money. The LINTON yield method, a theoretical approach, attempted to remedy this by comparing a cash value policy with a combination of decreasing term insurance and the yield of a side fund of bonds and other investments. Other methods have been proposed. At present many states require prospective insureds to be given interest-adjusted cost figures that do take into consideration the time value of money. This method is not altogether practical for INTEREST SENSITIVE POLICIES, but it is generally felt that present work toward a new approach will eventually result in a useful means of comparing the costs of these policies.
Popular Insurance Terms
Provision in an all risks inland marine policy that denies coverage for exposure to dampness and extremes of temperature. Some property, like living plants, might be particularly vulnerable ...
Duration of a policy. Property and casualty coverages are usually written for one year, although a personal automobile policy can be for six months. Life insurance can be written on a term ...
Payments made to the insured by the insurance company before the settlement date. For example, a claim is scheduled to be settled on June 1, 2000, but the insurance company pays the ...
Provision of liability policies and the liability sections of package insurance policies, such as the personal automobile policy (pap), that pay medical expenses without regard to fault. ...
Husband's interest in his wife's property upon her death. A husband has an insurable interest in that property and can purchase a property and casualty insurance policy to cover the ...
Smallest acceptable premium for which an insurance company will write a policy. This minimum charge is necessary to cover fixed expenses in placing the policy on the books. ...
Local life insurance office that sells and services ordinary life insurance as well as other forms of life insurance except debt insurance. ...
Ratio of the insurance company's investment in common stocks dividend to its adjusted surplus account. This ratio shows how vulnerable the company's surplus is to the stock market ...
Inverse of the actuarial present value of a life annuity, taking the employee's life expectancy into account, to commence income payments at the normal retirement age of the employee. It is ...
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