R32: Risk Management For Individuals Flashcards
1
Q
What’s the human capital formula?
A
See notes
2
Q
What are the individual risk exposures?
A
Earnings risk Mortality risk Longevity risk Property risk Liability risk Health risk
3
Q
What are the types of life insurance?
A
Temporary
Permanent - participating and non, non-forfeiture clauses (extended term and cash surrender option)
4
Q
What are the three key elements of life insurance pricing?
A
Mortality expectations
Discount factor
Loading (expenses and profit)
5
Q
Features of annuities
A
Deferred vs immediate
Fixed vs variable
6
Q
What are the two ways to estimate insurance needs?
A
Human life value
Needs analysis
7
Q
The higher the correlation of human capital to risky assets the ______ the demand for insurance
A
Lower. DF increases do PV of HC decreases.
