Rajat gupta
Ton up Member
Hi All,
I have question on the following Surrender Value principle:-
"take account of surrender value offered by competitors (and possibly also auction values, where possible). Here I could not understand why an insurer be concerned about surrender value offered in secondary market. Even if it is higher than what an insurer offers,it will still have no effect for the original insurer.Policy will continue till maturity or earlier death and premiums will be paid (although by specialized broker/ other insurer rather then the insured person). I could not see if a policy is sold in secondary market then it will effect persist ency/lapse rates of original insurer. Can somebody please explain this principle and let me know if my understanding of auction value and secondary market is incorrect.
Regards,
Rajat
I have question on the following Surrender Value principle:-
"take account of surrender value offered by competitors (and possibly also auction values, where possible). Here I could not understand why an insurer be concerned about surrender value offered in secondary market. Even if it is higher than what an insurer offers,it will still have no effect for the original insurer.Policy will continue till maturity or earlier death and premiums will be paid (although by specialized broker/ other insurer rather then the insured person). I could not see if a policy is sold in secondary market then it will effect persist ency/lapse rates of original insurer. Can somebody please explain this principle and let me know if my understanding of auction value and secondary market is incorrect.
Regards,
Rajat