Chapter 17: Actuarial Funding

Question 1

Conditions for Actuarial funding to work (2)

Answer 1

• Need benefits contingent on death and survival
• Regular management charges must be higher than normal (management charge > management expense)
• Must be unit-related surrender penalty st unit reserve not lower than surrender value

Question 2

Max discount rate used in actuarial funding factor

Answer 2

Rate of annual fund management charge