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
Several insurance companies under common ownership and, often, common management. ...
Underwriting method used in classifying applicants for life insurance according to certain demographic factors and assigning weights to these factors. Factors include physical condition, ...
Coverage for specialists in various professional fields. Since basic liability policies do not protect against situations arising out of business or professional pursuits, professional ...
Extremely aggressive behavior by an insurance agent to convince a prospect to purchase the insurance product without due regard for the prospect's ability to pay the premiums and/or needs ...
Act that makes the liability cost for cleanup joint and several. Even if a party is only partially responsible for losses inflicted, that party may be liable for the payment of the total ...
Language in the insurance policy that can be considered unclear or subject to different interpretations. Under these circumstances, the courts have generally ruled in favor of insured ...
Provision that funds a tax-qualified plan. Trust funds are the oldest, and still the most common, method of funding pensions. All contributions made by employer and employees are deposited ...
Accounts in which assets are allocated across the spectrum of equity, debt, and money market instruments. They are the most popular equity investment in variable annuities and variable life ...
Policy in which an insurer agrees to pay property or liability losses in excess of a specific amount per occurrence. For example, this type of coverage typically is used by an employer that ...
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