Surrender Cost Index
Method of comparing the costs of a set of cash value life insurance policies that takes into account the time value of money. The true costs of alternative cash value policies with the same death benefit depend on a number of factors amount and timing of premiums paid, amount and timing of dividends (in the case of participating policies), time period involved, and the CASH surrender value. In evaluating a particular group of policies, a surrender cost index can be calculated using interest adjusted cost comparison. The index ranks the policies for the same period of time, say the first 20 years of the policy life, by cost per $1000 of face amount, showing the cheapest through the most expensive. In effect, the index illustrates the relative cost of acquiring a dollar's worth of each policy's cash surrender value after 20 years. Contrast with the net payments index, a ranking of policy costs using the traditional net cost method of comparison that ignores the time value of money and thus gives a less accurate picture of relative policy costs.
Popular Insurance Terms
Life insurance: Bonds most state regulations permit life insurance company investments in debentures, mortgage bonds, and blue chip corporate bonds. Stocks(a) preferred stock investment ...
Method of valuing a reserve under which a life insurance policy, from an actual point of view, combines one-year term insurance and a one-year deferred plan. Here the net premium is ...
Inability of the insured to perform one or more of the important daily duties of that insured's occupation. The income payment to the insured is reduced from that of total disability. ...
Life insurance policy provision under which the policyholder may apply the accumulated cash value, in the form of a single premium payment, to pay up the policy or to mature the policy as ...
coverage issued to a creditor on the life of a debtor so that if the debtor becomes disabled, the insurance policy pays the balance of the debt to the creditor. ...
pool that contains various reinsurance companies with each sharing reinsurance contracts on a pro rata basis as they are submitted to the pool. market that operates much like the New York ...
Right that has a limited time in duration for an individual to receive the income generated by assets owned by another individual. ...
Condition for inland marine liability insurance coverage that states a loss or claim must occur in the policy territory. Policy territory for a liability policy includes the U.S., its ...
Adjustment in property insurance to reflect increased construction costs. ...
Have a question or comment?
We're here to help.