Hi In this part didnt understand the mortality risk for UL explained in the examiners report- "Mortality up for the term business [½] small impact for UL as have lower charges". Please explain.
Higher mortality than expected will have the biggest impact on the term assurance as payments are guaranteed and dependent on death. As the payment on death under the unit-linked contract is the unit fund value, there will be little risk to the company as there is no extra cost. However, this will mean that there is lower inforce and so lower future charges being received.
