G
Greg
Member
Hi all.
Ok - writing this at 5pm the day before an exam at 2pm the next day may be rather late in the day. But I thought Id try just in case anyone happened to check the forums and respond before tomorrow lunch time!
This is not something that I have ever seen come up on a paper. But I just thought of it - and its the kind of nasty thing that could catch people out.
Mutuals are "owned" by the policyholders themsleves, rather than shareholders. Ok. Now I understand how that works in life insurance (e.g. with profit funds with low guaranteed sum assureds where if experience is good everyone's life assurance sum or endowment assurance etc gets increased by bonuses thus distributing the "profit" to the policyholders).
But how does this work in GI?
Unlike life, most GI policies never pay out. So how do policyholders (who I assume are the "owners" like in life insurance) see any profits that may emerge? Do people get periodic part refunds of premium? Surely claims arent settled at higher than fair value to distribute the surplus!?!? Who (and how) do "profits" in a mutual phyiscally get distributed?
Thanks to anyone who reads this and can give even a guessed response! Like I say I very much doubt this kind of thing would come up...but its something that came into my head!
Greg
Ok - writing this at 5pm the day before an exam at 2pm the next day may be rather late in the day. But I thought Id try just in case anyone happened to check the forums and respond before tomorrow lunch time!
This is not something that I have ever seen come up on a paper. But I just thought of it - and its the kind of nasty thing that could catch people out.
Mutuals are "owned" by the policyholders themsleves, rather than shareholders. Ok. Now I understand how that works in life insurance (e.g. with profit funds with low guaranteed sum assureds where if experience is good everyone's life assurance sum or endowment assurance etc gets increased by bonuses thus distributing the "profit" to the policyholders).
But how does this work in GI?
Unlike life, most GI policies never pay out. So how do policyholders (who I assume are the "owners" like in life insurance) see any profits that may emerge? Do people get periodic part refunds of premium? Surely claims arent settled at higher than fair value to distribute the surplus!?!? Who (and how) do "profits" in a mutual phyiscally get distributed?
Thanks to anyone who reads this and can give even a guessed response! Like I say I very much doubt this kind of thing would come up...but its something that came into my head!
Greg