YOU ASK:

What is the definition of Interest-Adjusted Cost Comparison Index?

WE ANSWER:

The Interest-Adjusted Cost Comparison Index refers to the index that compares the time value of money to the costs of the insurance policy. Time value of money refers to the supposed investment return if the money used for was invested somewhere else instead. Comparing what a person might pay for an insurance policy and what that money would have earned elsewhere gives the person valuable information that will enable him to determine the most cost-effective policy he can choose.

Some factors that are considered when computing for interest-adjusted cost include: the frequency of the premiums, the amount of the premium payments, the dividends paid (including the frequency of payouts, as well as the amount), the cash surrender value, and the length of the policy.

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