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
Rejection by an insurance company of an application for a policy. ...
Phrase describing a form of joint tenancy ownership where property passes to the survivors when one party dies. ...
Total income before adjustment for deduction as applied to tax calculation for both the individual and the firm. ...
Type of hold-harmless agreement made by a property owner as a condition for being served by a railroad spur. If the owner wants a special sidetrack, the railroad requires the owner to ...
Condition surrounding a work environment that increases the probability of death, disability, or illness to a worker. This class of hazard is considered when writing workers COMPENSATION ...
Organization that is part of a preferred provider organization (PPO) in which enrollees select an EPO provider to act as their primary care physician and serve as the gatekeeper. This ...
Trade association of insurance companies that writes transportation, aviation, and marine insurance. The association began operation in the 1880s and it suggests standard clauses to be ...
Settlement of a dispute that arises when two or more insurers cover a single loss, and there is a question concerning the amount each is responsible to pay. The companies are bound by the ...
Coverage available under two forms for actual or attempted robbery of money, securities or other property. Under the First Form the policy covers if the robbery is committed on the premises ...
Have a question or comment?
We're here to help.