interest-sensitive insurance policy

Definition

A type of cash value life insurance (for example, whole life insurance) with dividend rates that vary with fluctuating interest rates. This allows them to avoid a loss of purchasing power, even if inflation rises unexpectedly. However, if inflation declined, the policy would earn lower interest.

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Nearby Terms

interest-elastic
interest-inelastic
interest-on-interest component
interest-only loan
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interim
interim dividend
interim financing
interim rate of return