Definition of "Rate of return method of cost comparison"
Approach advocated by the Federal Trade Commission (FTC) in its 1979 life insurance cost disclosure report. It calculates the rate of return earned by the savings element of a life insurance policy in these steps:
determine pure cost of protection (mortality expectation).
determine amount of dividends paid (if it is a. participating policy).
subtract the pure cost of protection plus dividends from the GROSS PREMIUMS paid into the policy. This is the savings element.
the rate of return equals the interest rate at which the savings element must be accumulated in order to equal the cash value of thepolicy at some future specified time period.
Department of Defense triple option managed health care program consisting of three options: Tricare Prime (health maintenance organization), Tricare Extra (preferred provider ...
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Type of premium plan under which the employer (if noncontributory plan) or the employer and employee (if contributory plan) make level annual premium payments to fund the future retirement ...
System of classifying face amount of policies according to size within a given range. The premium rate per $1,000 of face amount varies on a declining basis. As the face amount increases, ...
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 ...
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Health insurance also known as .disability insurance. is insurance of human beings against bodily injury, disablement, or death by accident or accidental means. ...
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Every person has a different idea of what financial security means. If so, should happen to you, how much money would you family need? You should consider:
- Your current debt.
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