A
Adam
Member
A question on page 7 of SA2-03 asks "Explain why payouts on 25-year conventional with-profits endowments might fall despite having investment returns of 10% over the year". I have difficulty in understanding what it is trying to ask and the answer provided. Could anyone help with this, please? Thank you.
Answer is "The returns 26 years ago might have been greater than 10% and these would no longer be relevant for the latest 25-year maturities". Where is the 26 from? Does it mean that the policy will mature in 25 years from today and 10% is only the investment return in year 1 of the policy?
Answer is "The returns 26 years ago might have been greater than 10% and these would no longer be relevant for the latest 25-year maturities". Where is the 26 from? Does it mean that the policy will mature in 25 years from today and 10% is only the investment return in year 1 of the policy?