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
Same as term Adjuster: individual employed by a property and casualty insurance company to settle on its behalf claims brought by insureds. The adjuster evaluates the merits of each claim ...
Includes rate of return, how long the annuity's interest rate is guaranteed, loads (front, middle and back), financial ranking of the insurance company offering the annuity, the monthly ...
Denial of coverage for damage, in inland marine insurance, stemming from routine use of the property. Property can be expected to deteriorate somewhat over time from normal use. This is not ...
Legal right of a passenger in an automobile involved in an accident to bring a liability suit against the driver. It is deemed that a special standard of care is owed by an automobile ...
Element used to adjust losses to reflect the incurred but not reported claim (IBNR) under the retrospective method of rating. ...
Coverage by at least two insurance policies providing the same coverage for the same risk. ...
Division of a sum of money between a deferred annuity and an immediate life annuity certain. ...
In property insurance policy, clause that stipulates that if legislative acts or acts of the insurance commissioner's office expand the coverage of an insurance policy or endorsement forms ...
Section of some inland marine insurance {transportation insurance) and many other property insurance policies excluding coverage for damage to shipped goods by vermin such as rats. ...
Have a question or comment?
We're here to help.