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
Premium that remains unchanged over time, regardless of any change in the nature of the risk. ...
Section of the Internal Revenue Code that provides for the taking of the proceeds from one life insurance policy or annuity and the reinvesting of these proceeds immediately in another life ...
Commission paid to a broker for selling an insurance company's products. This fee may or may not include an expense allowance depending on the amount of business the broker places with the ...
Life insurance company that sells life insurance and annuities to the faculty and staff of colleges and universities. Its TIAA-CREF Tax-Sheltered Annuity (TSA) uses a traditional fixed ...
Amount of the insurance company's liabilities for claims that have not been settled. If this reserve increases significantly in relation to the company's surplus, the risk is greater for ...
Reinsurance of & re insurer such that the re insurer protects itself from a catastrophe occurrence. Just as an insurer must decide to cede to the re insurer a portion of a risk it has ...
Coverage in which premiums do not increase or decrease for as long as the policy remains in force. In the early years of a policy, the premiums are greater than is necessary to pay ...
Liability insurance exception for pollution coverage that is not both sudden and accidental from the insured's standpoint. As a result of the damage suits from such incidents as the ...
Bonds sold at a discount from their face value; accumulated interest paid at maturity, as in the case of zero coupon bonds. Interest rate minimum is guaranteed with the prevailing interest ...
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