Hello,
According April 2016 Paper 1, question 4 part (i).
The answer implies that Surrender profits occur when more than expected policies are surrendered. But surely that would depend on:
1. Asset Share
2. Surrender Penalty
3. Surrender Fee?
so if a policies is surrendered lets say at the beginning of the term, you will be making a loss on every single surrender. So you could have a scenario where the number of surrender is lower than expected?
Thanks,
Tong
According April 2016 Paper 1, question 4 part (i).
The answer implies that Surrender profits occur when more than expected policies are surrendered. But surely that would depend on:
1. Asset Share
2. Surrender Penalty
3. Surrender Fee?
so if a policies is surrendered lets say at the beginning of the term, you will be making a loss on every single surrender. So you could have a scenario where the number of surrender is lower than expected?
Thanks,
Tong