A method of comparing the costs of cash value life insurance takes into account the time value of money. If you’re primarily concerned with cash values and don’t think you’ll keep the policy forever, you’ll want a lower surrender cost index.
The surrender cost index ranks all policies for the same period of time. It illustrates the relative cost of acquiring a dollar’s worth of life insurance under each policy during that period. The lower the surrender cost index at any given time, the less expensive the policy is.
A specialized policy ranking, each life insurance company provides its own policy index, based on the type of policy purchased, the time of purchase, and the amount purchased.