Which of the Following Statements About the Surrender Cost Index

question 2

Multiple Choice

Which of the following statements about the surrender cost index for measuring the cost of life insurance is true?

• A)It is based on the assumption that the policy will be in force indefinitely.
• B)It takes into account the settlement options available in the policy.
• C)It does not consider the cash value in the policy.
• D)It takes the amount and timing of each dividend into consideration.

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Definitions:

Cash Flows

The total figure of money being moved into and extracted from a business, critically affecting its liquid assets.

Rate Of Return

The gain or loss of an investment over a specified period, expressed as a percentage.

Cash Flow Growth Rate

A measure of how fast a company's cash flow increases over a certain period, indicating financial health.

Timeframe

A timeframe refers to the specific period during which an event occurs or is planned to take place, often used in planning and scheduling contexts.