Matching Pairs Risk Chp. 13Online version Risk Chp. 13 by Ryan Brown 1 Interest-adjusted cost method 2 Net payment cost index 3 Surrender cost index 4 Traditional net cost method measures the relative cost of a policy if death occurs at the end of some specified time period, such as 10 or 20 years. It is based on the assumption that you will not surrender the policy. earlier method of determining cost to an insured of a life insurance policy, determined by subtracting the total dividends received and cash value at the end of a period from the total premiums paid during that period. does not consider the time value of money and is no longer used. measure the cost of life insurance if you surrender the policy at the end of some time period, such as 10 or 20 years, and takes compound interest into account. under this method, the time value of money is taken into consideration by applying an interest factor to each element of the cost calculation.
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