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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Length of time required to amortize the excess expenses of acquiring a given group of life insurance policies. In acquiring a policy, a life insurance company may incur expenses (such as ...
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The term pro rata comes from Latin and translates to in proportion, proportionally, the proportion of, proportionately determined, or according to a specific rate. It is often used in legal ...
Figure in a mortality table derived by dividing the number of people dying during a given year by the number of people alive at the beginning of that same year. ...
Type of surety bond that is either a fiduciary or a court bond. Fiduciary Bond guarantees that individuals in a position of trust will safeguard assets belonging to others placed under ...
Group of insurers or re insurers involved in joint underwriting. Members typically take predetermined shares of premiums, losses, expenses, and profits. Syndicates, more common in ...
Document used in the transportation of goods that must be presented when a claim is made for a loss incurred. This document establishes the fact that the goods were under the care, custody, ...
Retention of all files of policies sold by the agent of record who, according to written agreement with the insurance company, has the exclusive rights to solicit renewals. ...
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