• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Sept 2018 Q1

K

Krati Gupta

Member
Suggest atleast 10 reasons why the payout from a with profit policy might be different from the policy's asset share?

I am unable to understabd all the reasons given in the ques paper solution, please provide a better solution.
 
Hi

It might help to think of them in groups:
(1) the first few points in the examiners' report are about the fact that a WP policy will pay higher of an amount based on asset share and a guaranteed amount (SA + guaranteed bonuses) at death or maturity.
(2) some reasons relate to why a surrender payout may be different from the asset share, eg surrender penalty or if asset share is negative.
(3) some reasons relate to why a payout may be 'based on' asset share but not exactly equal, eg smoothing, approximations in the asset share calculation, items that might be added to (eg estate) or subtracted from (eg tax) the payout separately from the asset share calculation.
 
Back
Top