MTHEL131 Chapter Notes - Chapter 4: Term Life Insurance, Life Table, Life Insurance
14 Oct 2013
School
Department
Course
Professor
Document Summary
Various factors affect life and health insurance supply and demand. Competition among service retailers is increasing, and new requests are being made, such as: potentially lower-cost coverage competition puts pressure on companies to develop lower-cost policies insurers seek riskier investments. Indeterminate-premium plans: type of whole life insurance that specifies two premium rates: a guaranteed maximum, and a lower rate you actually pay, the lower premium level is for a set period of time. Then the company establishes a new rate, but your premium can never be more than the guaranteed maximum. More refined classification systems: persons of higher risk get charged more, there are 6 sets of rates. Provisions to encourage persistency: to avoid lapses, insurers charge high costs for early surrender, and bonuses for policies that remain for a number of years, increased flexibility face amount can be increased/decreased. Premium payments can vary: greater disclosure. Policy owners get annual transaction summaries interest is also disclosed.
