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
Model state law of the NAIC setting general standards for group life insurance contracts. It specifies which types of organizations can sponsor group life insurance plans and outlines the ...
In a mercantile open-stock burglary insurance policy, the dollar amount of coverage as required by the COINSURANCE clause. This dollar amount is the MAXIMUM PROBABLE LOSS (MPL) of ...
Coverage in the event an employee is kidnapped from an insured business's premises and forced to return to aid a criminal in a theft. ...
Same as term Burglary Insurance: coverage against loss as the result of a burglary. Found as part of the commercial package policy that has generally replaced the special multiperil ...
The term pro rata cancellation comes from the Latin term pro rata, which means in proportion or according to a certain rate. The term pro rata cancellation is used in the insurance business ...
Illness contracted as the result of employment-related exposures and conditions. Coverage for such diseases is found under workers compensation insurance. ...
Form of insurance whereby the buyer (reinsurer) assumes the entire obligation of the cedent company, effected through the transfer of the policies from the cedent to the books of the ...
Coverage when a director or officer of a company commits a negligent act or omission, or misstatement or misleading statement, and a successful libel suit is brought against the company as ...
Certificate of insurance required by law under the auspices of the Interstate Commerce Commission. The endorsement is attached to all inland marine policies issued to interstate motor ...
Have a question or comment?
We're here to help.