Question

How does the excess of asset share over surrender value impact profits?

a.

It decreases profits

b.

It has no impact on profits

c.

It increases profits

d.

It leads to policy termination

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (a).It decreases profits Explanation:The excess of asset share over surrender value, at the time of withdrawal, represents the profit earned on the contract. If this profit is less than expected, it decreases profits, impacting the intended profit margin negatively.

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