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Term Premiums

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Term premiums
Excess of the yields to maturity on long-term bonds over those of short-term bonds.

Term Premium
The amount by which the yield-to-maturity of a long-term bond exceeds that of a short-term bond. Because one collects coupons on a long-term bond for a longer period of time, its yield-to-maturity will be more. The amount of a term premium depends on the interest rates of the individual bonds.


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Second, macroeconomic uncertainty is back with a bang, bringing with it rising term premiums.
Demand for real estate was at its peak during last year's event and speculators and amateur investors were eager to capitalise on short term premiums," Goodchild added.
Compare that to the current value of the bonds (it won't increase since you will use the income for premiums), plus the future value of all the term premiums, if you invested them in an account for 30 years (this is a recaptured opportunity cost since you will not need the term insurance), plus the cash value of the whole life policy.
 
 
 
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