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
Organization founded in 1993, the thesis of which is to apply quality management principles to insurance functions. To this end, the organization is involved in insurance industry-wide ...
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Section of a policy specifying: parties to the contract (the insurance company and the person or business to be insured); terms of the policy when it goes into force, and when it ends; ...
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Amount established by an insurance company, but not required by state law, for any of a number of reasons, such as a reserve for payment of future dividends. A voluntary reserve is likely ...
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