Question: 1-Think about what insurers do with premium dollars while they wait for claims to come in. If interest rates decline what is the most likely

1-Think about what insurers do with premium dollars while they wait for claims to come in. If interest rates decline what is the most likely effect on new life insurance policy rates and the amount of life insurance most young families will need to maintain their lifestyle if the main breadwinner dies?(when compared to life insurance rates and needs before interest rates changed.) Assume that there is a lot of competition for customers.

a.Life insurance rate will decrease and amount of insurance needed will increase.

b.Life insurance rate will increase and amount of insurance needed will increase.

c.Life insurance rate will increase and amount of insurance needed will decrease.

d.Life insurance rate will decrease and amount of insurance needed will decrease.

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