MTHEL131 Lecture Notes - Mutual Organization, With-Profits Policy, Manulife

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Assuris: non-profit organization under canadian federal regulation to protect policyholders in the event that a life insurer should become insolvent. When the old equitable began pricing their policy (premiums), they considered: mortality, investment returns, expenses of the company. Company takes premiums and puts them into reserve. When a claim comes in money is taken out of reserve. You don"t need total sum of potential claims in reserve because: People aren"t going to die at the same time. The old equitable had ,000,000 in the reserve. Actuaries estimated that they only needed ,000,000 to satisfy the claims excess of million. Money belongs to policy-owners, so if reserve has excess, it"s necessary to give it back to policy-owners. Ways of giving it back: reduced premiums (p. r. o. Premium reduction option: cash (sending them a cheque, accumulation option (on deposit) dividends would be deposited every year. Policy-owner can withdraw the money at any time: additional coverage (p. u. a.

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