M
Mbotha
Member
Chapter 2 mentions that a high income bond may consist of:
How do call options provide exposure to equity price movements? In the UL version of the product, what I initially thought was that these options would allow the insurer to buy the underlying assets / equities at a given price at some point in the future (as premiums are received). But this is a single premium product so I'm a little confused.
Also, how does it work in the index-linked version?
- A temporary annuity to provide the income
- A zero coupon bond to provide a minimum capital guarantee
- Call options to provide exposure to equity price movements
How do call options provide exposure to equity price movements? In the UL version of the product, what I initially thought was that these options would allow the insurer to buy the underlying assets / equities at a given price at some point in the future (as premiums are received). But this is a single premium product so I'm a little confused.
Also, how does it work in the index-linked version?