What does Persistency mean in Life Insurance?

A company is only as successful as the number of customers it is able to retain. Persistency in life insurance, therefore, refers to the percentage of customers paying the policy premium out of the total number of clients that the company has over a defined period.

Simply put, persistency = No. of customers paying the Premium / Total customers * 100

A high persistency rate is indicative of satisfied customers and an effective sales practice.

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