Life Insurance Question?
Since there are no government entities that step in to guarantee liabilities of a life insurance company should it fail to satisfy obligations, the pricing terms that life insurance companies offer on policies are related directly to their….
a - total assets
b - total liabilities
c - securities & exchange commission rating
d - financial rating
November 27th, 2009 at 3:26 AM
e - none of the above is the better answer, but given the alternatives ‘A.’
November 27th, 2009 at 3:26 AM
All states have the state guarantee association which will guarantee all terms of your policies up to a maximum limit (usually 250K). Therefore any policy of 250k or less is guaranteed to be protected as it would be transferred to the association, which can never fail as it is regulated by all the state governments in the event that an insurer goes out of business. Any policy over 250k would be reduced to 250k and the premium would be equal to that of the price and terms of that type of policy at the time of the purchase.