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
Same as term Convertible Term Life Insurance: coverage that can be converted into permanent insurance regardless of an insured's physical condition and without a medical examination. The ...
Charitable planning strategy under which a donor transfers title to his or her residence or farm to the charity. Upon transfer of title, the donor reserves the right to occupy the property ...
Expenses taken out when benefits are paid. For example, a specific dollar amount is subtracted from a monthly income payment for company expenses. ...
Extent of the loss caused by accidents. Used in predicting the dollar amount of losses upon which the premiums are based. ...
Payments in excess of the value of the loss a prohibited practice. When an insured has more than one policy covering a risk, the full value cannot be collected from each policy if a loss ...
Organization of over 300 property and casualty insurance companies whose mission is to investigate fraudulent claims and bring to justice those making such claims. ...
Elements within a group under study that have the same characteristic (s), have the same expectation of loss, are very much alike with respect to the variable under consideration, and do ...
Amount that each member of a pool contributes to that pool. ...
Rules stating that, for any portion of the payment made to the employee from an eligible rollover distribution, the plan administrator is required by federal law to withhold 20% of the ...
Have a question or comment?
We're here to help.