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What is the definition of Surrender Cost Comparison Index?

WE ANSWER:

The Surrender Cost Comparison Index is an index used to evaluate two or more insurance policies or annuities. It computes for the present value of premiums paid or deposits made. As such, one can compare the policies or annuities by looking at how much these cost over a 10- or 20- year period, with the assumption that the owner decides to surrender the contract for the cash value at the end of the said time.

The surrender cost comparison index takes into account the timing of the dividends to be paid, the amount of dividends expected, as well as the amount and regularity of paid premiums.

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