Ch1: Life Insurance Products

Question 1

Product cycle

Answer 1

1. product design
2. pricing
3. marketing & sales
4. underwriting
5. claims management
6. experience monitoring
7. valuation

Question 2

Customer needs met by endowment assurance

Answer 2

Savings vehicle

• lump sum upon retirement
• repay capital portion of interest-only loan
• benefit on death (provides protection for dependents)
• surrender value typically payable
• can be used as a means to transfer wealth from parents to children

Question 3

Capital requirements depend on

Answer 3

1. the design of the contract
2. the frequency of the payment of the premium
3. the relationship between the pricing and supervisory reserving bases
4. the additional solvency capital requirements
5. the level of initial expenses