Question

How can term products be designed to mitigate withdrawal risk?

a.

By increasing the premium frequency

b.

By offering higher surrender values

c.

By ensuring nil surrender values

d.

By reducing the policy duration

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).By ensuring nil surrender values Explanation:Term products can be designed to mitigate withdrawal risk by ensuring nil surrender values, which reduces the incentive for policyholders to withdraw their policies.

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Q. How can term products be designed to mitigate withdrawal risk?
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