YOU ASK:
What is the definition of Net Payment Cost Comparison Index?
WE ANSWER:
The Net Payment Cost Comparison Index shows the present value of the premium payments made over a certain number of years. This helps to determine the cost of a policy and thus helps an individual to compare two or more life insurance policies. The Net Payment Cost Comparison Index looks into the time value of money.
The computations are based on the assumption that the policyowner will regularly pay the premiums on the policy and will not be getting in the cash value (or surrendering the policy).
This kind of index is useful to those who are more interested in death benefits their beneficiaries stand to get from their life insurance.
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