Which of the following statements is (are)true with regard to using interest-adjusted cost data when shopping for life insurance?
I.Cost indexes apply to new policies and should not be used to determine whether to replace a policy.
II.Cost indexes should only be used to compare similar plans of insurance.

Question

Quizplus · Accepted Answer

Both statements are true. Interest-adjusted cost data should be used to compare policies only if they are similar, and it should not be used to determine whether to replace an existing policy with a new one. This is because the cost index only reflects the cost of insurance and does not take into account other factors such as cash value, surrender charges, and policy loans.

Which of the Following Statements Is (Are)true with Regard to Using