Question

How are reserves calculated for life insurance policies?

a.

Reserves are calculated collectively for all policies.

b.

Reserves are calculated based on past cashflows only.

c.

Reserves are calculated policy by policy as per regulation.

d.

Reserves are calculated without considering guaranteed outflows.

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).Reserves are calculated policy by policy as per regulation. Explanation:Reserves for life insurance policies are calculated individually for each policy as per regulation. This ensures that each policy's liabilities are accurately accounted for.

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Q. How are reserves calculated for life insurance policies?
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