Question: Why do certain policies, such as universal life and variable life, contain substantial investment risk?

Why do certain policies, such as universal life and variable life, contain substantial investment risk?

Step by Step Solution

★★★★★

3.40 Rating (153 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Universal life and variable life insurance policies often contain substantial investment risk becaus... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Principles Of Risk Management Questions!

Q:

Scenario: Absco, Inc., is a calendar year - end clothing manufacturer that sells exclusively to retailers. It engages in a large number of contracts with its customers. Absco signed a contract with...

Q:

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

Q:

1. Hannah is applying for a life policy on her girlfriend Sarahs life. The policy is $500,000 and carries a large premium. Hannah is the main earner, so she is concerned about not being able to pay...

Q:

You are a financial planner with a specialty in risk management. Youve completed the LLQP and are licensed to sell insurance products. You love your career and have built a successful practice based...

Q:

bumally, assisted Michael Singh in the preparation of his whole life policy. The face value of the policy was $1.5 million, and 73,895, paid 12 a dregue issued by his amplayer. Linda is able to...

Q:

TRUE FALSE (2 points each) 1. Risk is uncertainty regarding economic loss. True Insurance company underwriters determine who they can insure and what rating-class is appropriate. Generally, the...

Q:

1. Which of the following is not a major type of life insurance? Multiple Choice a. Term b. Universal life c. Variable life d. Variable term life e. Whole life 2. Which of the following is not a...

Q:

Pauline, age 4 5 , would like to purchase life insurance. She wants a policy that will provide strong protection and build up a cash value. Pauline has a low risk tolerance and is prepared to make...

Q:

Question 1. What is the difference between a named peril homeowners insurance policy and an open peril policy? Question 2. What are the main coverages provided by the homeowners' insurance? Question...

Q:

1.Which of the following is not a characteristic/feature of Universal life? A) Flexible Premiums B) Separate Investment Accounts C) Flexible Death Benefits D) Current interest rate crediting 2. Life...

Q:

A parent with adequate personal insurance coverage and sound retirement planning already in operation would like to make an exchange of his daughter's $ 2 5 , 0 0 0 whole life policy that has been...

Q:

Suppose Laura Spears starts a tree nursery business. What kind of fixed costs would she be expected to incur? What identifies those costs as fixed?

Q:

Refer to Exercise 5.30. In fact, the researcher was more concerned about determining if the lead in the paint reduced the mean number of Type 2 fibers in skeletal muscles. Does the change in the...

Q:

Content Area A schedule of accounts receivable is prepared to a. prove that the general ledger and accounts receivable ledger were posted at the same time. b. verify that the sum of the accounts...

Q:

Consider the null model, for simplicity with known ????2. After estimating ???? = E(y) by y, you plan to predict a future y from the N(????, ????2) distribution. State the formula for a 95%...

Q:

a. The human life value is one method for estimating the amount of life insurance to own. Keeping all other factors unchanged explain the effect, if any, of each of the following: 1. The discount...

Q:

Kelly, age 35, is a single parent and has a one-year-old son. She earns $45,000 annually as a marketing analyst. Her employer provides group life insurance in the amount of twice the employees...

Q:

Janet, age 28, is married and has a son, age 3. She wants to determine how much life insurance she should own based on the capital retention approach. She would like to provide $30,000 each year...

Q:

16-53 Manufacturing Variances Clemson prepares its budgets on the basis of standard costs. A report is prepared monthly showing the differences between master budget and actual results. Variances are...

Q:

In 2023, Penny Hardaway and his son purchased real estate for an investment. The price of the property was $636,000, and the title named Penny and his son as joint tenants with the right of...

Q:

eed to offer? he ratio should be shares of Loki for every share of Thor. (Round to two decimal places.)