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
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Same as term Tabular Plans: retrospective rating system with basic, minimum, and maximum premium rates listed in manual tables. Calculation of an individual premium involves adjusting the ...
Form showing notification that an insurance policy has been renewed with the same provisions, clauses, and benefits of the previous policy. ...
Upper limit on the maximum possible interest rate an insurance company will pay. If the market interest rates are below that maximum, the insurance company pays the market interest rate. In ...
Replacement car or additional car as used in the personal automobile policy. ...
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Element usually found in industrial life insurance policies under which the insurance company upon the death of the insured under certain conditions is allowed to choose the beneficiary if ...
Type of grantor-retained income trust (grit) in which the grantor retains the right to the assets of the trust should he or she die before the term of the trust expires. ...
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