Net Payment Cost Index

An index which calculates the difference between the costs paid by the policyholder and the monies that would be due if he or she dies at any point in time while the policy is in effect.

Net Payment Cost Index
Net Payment Cost Index

Basically an earnings table, the net payment cost index is used mainly in calculating death benefits. Using factors such as cash values, dividends and premiums, it helps the purchaser compare costs at different points in the future to see what the insurance plan might be worth if the policy’s cash value remains intact.

A smaller index number is usually a better buy than a larger one, so it’s wise to ask an insurance agent to provide this information for your reference. Index amounts are based on age at the time of purchase and the amount of coverage bought.

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