Life · Chapter 6 · Policy Cost Comparison
Comparative Interest Rate (CIR) Method
Definition
The rate of return an investment account would need so that "buy term + invest the difference" equals the cash value policy's result. Face amounts compared must be identical.
Exam tip
The HIGHER the CIR, the LESS expensive the permanent policy is compared to the term-plus-investing alternative.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms