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
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Local life insurance office that sells and services ordinary life insurance as well as other forms of life insurance except debt insurance. ...
Utilization of life insurance to make annual gifts into a trust in order to produce the largest tax-free death benefit possible to the trust beneficiaries. ...
Procedure to minimize the adverse effect of a possible financial loss by (1) identifying potential sources of loss; (2) measuring the financial consequences of a loss occurring; and (3) ...
Insurance coverage sold by a broker as contrasted with insurance coverage sold by an agent. ...
Distribution of a deceased beneficiary's share of an estate among all of his or her living heirs. Contrast with per stirpes. ...
In insurance, volume of premiums written. Also describes commercial activities with the profit motive as the goal of the organization. Commercial insurance companies are organized with the ...
Means of funding permitted under the employee retirement income security act of 1974 (ERISA). The administrator of a pension plan can comply with required minimum funding standards by ...
Funding of an employee's benefits in a pension plan for his or her beginning past service of employment. This is a significant cost factor in pension planning and financing of future ...
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