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Principles of Risk Management and Insurance, 13th Edition by Michael McNamara, George E. Rejda

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Rate Of Return On Saving Component

Another important consideration is the rate of return earned on the saving component of a traditional whole life insurance policy. Consumers normally do not know the annual rate of return they earn on the saving component in their policies. A consumer who buys a traditional cash-value policy with a low return can lose a considerable amount of money over the life of the policy through forgone interest. Thus, the annual rate of return you earn on the saving component is critical if you intend to invest money in a life insurance policy over a long period of time.

Linton Yield

The Linton yield is one method that can be used to determine the rate of return on the saving portion of a cash-value policy. It was developed ...

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