What Is Life Insurance Net Payment Cost Index?

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2 responses to “What Is Life Insurance Net Payment Cost Index?”

1. 

   February 25, 2015

   David G. Pipes, CLU®, RICP®

   This is a technique used to determine the amount of money a person would pay over a given term for a given death benefit. Using this technique a consumer can evaluate competing insurance contracts and chose the policy that most adequately meets their needs. The idea is that a policy with a low cost index is a better buy but again, this only applies when comparing similar policies and does not consider the surrender value of the policy
2. 

   November 30, 2014

   Matthew Schiff

   The Net Payment Cost Index is the net cost of the insurance over a set period of time. It is the pure cash out of pocket (i.e. Mortality cost) and is comparable between all policies. Term insurance has the lowest net payment cost and cash value polices have a higher index.