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Old 03-01-2019, 02:06 PM
timothy40 timothy40 is offline
Join Date: Sep 2018
Posts: 6
Default Fair market valuation of life insurance

I have a few questions about Fair Market Valuations of life insurance policies. I've done some reading, but haven't been able to find answers. I'm wondering if anyone who performs these calculations can help.

1. For policies that have non-guaranteed elements, are those non-guaranteed elements included in the FMV calculation? I'm thinking along the lines of a par policy, where future dividends aren't guaranteed and can be expected to fluctuate in the future.

2. Is future mortality improvement included in the mortality calculation? I know that mortality improvement tends to be used for valuation purposes when setting reserves, but wasn't sure if it was used for fair market value calculations.

3. How is it handled when the actual death benefit depends on market returns or a variable interest rate that the insurance company can change at its discretion? If there's a variable credited interest rate, would the minimum guaranteed rate be used? Even if the current credited interest rate was much higher? In the case of variable products where the credited amount depended on market returns, how would that be handled?
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