J
joe90
Member
Q 2.8 of Q&A bank has a unit linked product with less than 100% allocation, 5% b/o spread, 1.2% amc and a surrender value of bvu - 7% of prems due up to the 8th anniversary.( 10 yr term)
It says discuss when the duration of the negative sterling reserves might be supported?
The answer says during first 8 years at most when SP applies. Could you explain this a bit more?
However, I thought that if we have a surrender penalty and the policy is actuarially funded(it may not be in this question) then there is a positive sterling reserve required to buy back the units to bring it up to the full value of the fund. This reserve would be unwound as the units are bought back???
It says discuss when the duration of the negative sterling reserves might be supported?
The answer says during first 8 years at most when SP applies. Could you explain this a bit more?
However, I thought that if we have a surrender penalty and the policy is actuarially funded(it may not be in this question) then there is a positive sterling reserve required to buy back the units to bring it up to the full value of the fund. This reserve would be unwound as the units are bought back???