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					Insurance and Risk Management
    Lecture 5 : Life Insurance
         (and Annuities)
   Chapters 16 ~ 18 in Rejda (2011)



  Ch. 16: Fundamentals of Life Insurance
  Ch. 17: Contractual Provisions
  Ch. 18: Purchase Decisions
                                                                        2



                             LIFE INSURANCE
I’m not afraid to die. I just don’t want to be there when it happens.
                                                        Woody Allen




   Life insurance protects against financial distress
          due to unexpected premature death.
                                                                     3

               Based on Mathematical
              Expectations of Life Span
                                       Ability to predict how many
                                       people of a particular
                                       group will die in a given
                                       period of time.




Allows companies to know how much to charge each individual.
                                                                                            4



                              Term vs. Whole Life
                                2500

• Methods of providing life insurance
   – Yearly renewable Term      2000


      • Pure life insurance
   – Level Premium Method       1500



      (Cash value policies)
      • Pure life insurance     1000



      • Savings accumulation
      • Examples                 500


         – whole life
         – universal life
         – variable life           0
                                  age 20   age 30   age 40    age 50      age 60   age 70



      • Why?                                         Term    Whole Life
                                                                         5



                     Lines of Life Insurance
     In individual lines, policies are sold directly to an individual.
     That person then chooses his or her beneficiary.




Group policies are often
sold to people who are
employees of the same
company. Everyone is
insured under one
master policy. Each
person names his or
her own beneficiary.
                                                                        6



                                     Living Benefits
Roughly half of all life insurance benefits are paid while the
      policyholder is living.
Cash Value - Amount paid in premiums plus interest earned
      minus expenses the company has incurred in providing
      the insurance.
Borrow Money - Borrow from the insurance company using the
        policy’s cash value to secure the loan.
Collect dividends - if the company makes a profit, some of the profit
        is returned to the policyowners (of mutual companies only)
                                                                      7




                                     Death Benefits
     Options for benefit disbursement:
Lump Sum Payment. Face value of policy is paid at one time.




Installment payments for a specified period of time. Payments are
made for X number of years and automatically include interest.
Example: Payments for ten years from $100,000 benefit might pay
$11,796 a year.

Installment payments of a specified amount. Certain amounts will be
paid each year until money (including interest) runs out.
Example: Want payments for $1,500 per month from a policy with
$100,000 benefit. Payments might continue for 6 years and 2 months.
                                                       8



                                       Annuities

Life annuities guarantee income for life

• Purchased the same way as life insurance.

• Purchasers usually determine amount per month they
  wish to receive.

• Size of payments depend on when payments start and
  how much has been paid in to annuity.

• Provide tax advantages.
                                             9




 Fundamentals: Premature Death
• Meaning of premature death

• Costs of premature death (severity)

• Chance of Dying Prematurely (frequency)

• Economic Justification of Life Insurance

• Amount of Insurance to Own
            • Human Life Value Approach
            • Needs Approach
                                       10



Probability of Death Prior to Age 65
                                       11



How Much Life Insurance Do You Need?
                                                           12




               Types of Life Insurance
There are worse things in life than death. Have you ever
  spent an evening with an insurance salesman?
                                             Woody Allen
• Traditional Products:
   – Term, Whole Life, and Endowment
• Product Innovation:
   – Universal and Variable (investment-linked)
• Other Products:
   – Modified Life Insurance, Second-to-Die Insurance,
     Group Life, ……
                                                              13




                                      Terminology
• Death benefit = amount beneficiaries receive
• Cash value = amount of savings accumulation
• Death protection = amount of pure death protection
                    = death benefit - cash value
• Face amount = stated amount of coverage
                = death benefit (for term, WL, and some UL)
                = death benefit - cash value (for some UL)
                                                          14




                             Term Insurance

• Data
  – 1/4 of policies (4% in HK; WHY?)
  – almost half of death protection purchased
     ==> Term Policies carry higher amount of insurance
• Guaranteed renewable
• May also be convertible
• Premium increases over time
                                                15




 Endowment Insurance (儲蓄壽險)

• Pays face amount

  – if the insured dies

  – if the insured survives the policy period


• Guaranteed Mutual Fund?
                                            16




                 Cash Value Insurance

• Cash Value Policies
  – Can obtain savings accumulation by
    surrendering the policy
  – Why bundle death protection & savings
    accumulation?

     • Tax advantaged method of saving
                                            17




                Whole Life Insurance

• Policy period ends when insured reaches
  100
• Equivalent to endowment policy to 100
• Premiums
  – single premium
  – limited pay
  – continuous premium
                                                                     18




          Examples of Different Payment Periods



                   Single                                         Term
                   Premium                                        Cost
20-pay-
life
          Paid-
          up-at
           65

          Whole
          Life

                  Pay more in early years to avoid paying later
                                                                         19




                         Whole Life Insurance
• Premiums generally do not increase over time
   – But probability of dying increases over time
     ==> higher up-front premiums than with term
   – Policyholder “prepays” part of the cost of future death
     protection
       • entitled to prepayments if policy is surrendered
       • this is the cash value (savings accumulation)
• If insured dies,
   – beneficiaries receive face amount = death protection + cash value
• Structured so
   – cash value  over time
   – death protection  over time
                                                                                          20




                           Whole Life Insurance
                Pattern of Cash Value and Death Protection for a

                 $100,000 Whole-Life Policy Issued at Age 30

Face Amount =
                                                              Death
$100,000
                                                              Protection 80
                                         Death

                                         Protection 60




                                                                Cash
                                             Cash
                                                                Value80
                                             Value60                                Age
                30                      60               80                   100
                                                            21




Participating Policies & Expense Loadings

• Participating means….
   – Mutuals always pay annual dividends; stock companies
     often do so too.
   – Why? - premiums based on conservative assumptions
   – Illustrated versus actual dividends
   – Dividend option: Cash payment; Reduction in next
     premium; Paid-up additional life; Deposit; One-year
     term
• Expenses loadings: Front-end expense charges
   ==> Cash value grows slowly at first
   ==> Implicit return on savings accumulation
      initially low (see page 380 of the text).
                                                                                                     22




       Comparison of Cash Values in Whole Life
    $100,000

     $90,000
C
     $80,000
A
S    $70,000
h
     $60,000
                                                                                       payments for life
V
A    $50,000                                                                           20 Year Payments
L                                                                                      Single Premium
     $40,000
U
E    $30,000
S
     $20,000

     $10,000

          $0
           40   44   48   52   56   60   64   68    72   76   80   84   88   92   96

                                                   Age
                                                            23




                                        Universal Life
• Similar to whole life
• Main differences:
  – Greater flexibility in premium payments
  – Cash value does not follow a fixed schedule; it
    varies with
     • policyholder’s premium payments
     • insurer’s expense and mortality charges
     • rate insurer uses to credit interest to cash value
         – minimum rate usually guaranteed
         – rate often linked to short term interest rates
  – Cash Withdrawal Permitted
                      24




WHY Universal Life?
                                               25




Factors Affecting UL Cash Value
       Cash value at beginning of period
                        +

    Premium payments at beginning of period
                        -

     Mortality charge at beginning of period
                        -
     Expense charge at beginning of period
                        +

        Interest credited at end of period
                        =

          Cash value at end of period
                                        26

Exhibit 17.3 Universal Life Insurance
            Death Benefits
                                                               27




Variable (Investment-Linked) Life
– Similar to whole life

– Main differences:
   • Cash value does not follow a fixed schedule; it
     varies with
      – return earned on portfolio of mutual funds chosen by
        policyholder

   • Death benefit
      – minimum is guaranteed,
      – varies with cash value
                                    28

               国内案例:
       投保量力而行,退保三思而行

• 2000年5月,罗女士听说某保险公司新推出投资连结保险,既有保
  障功能,又兼有理财功能,心里十分认可,正好自己的邻居高某在
  保险公司做保险代理人,于是,罗女士找到高某,为自己投保了该
  险种,每年需缴纳保费近万元。
• 不久,罗女士所在企业经营困难,其收入降低了许多,保费负担难
  以承受。因此罗女士想退保,到保险公司办理退保手续时,罗女士
  发现退保所得到的退保费不足所缴纳保险费的一半。
• 罗女士不解,自己的钱存银行后支取的还有利息,投在保险公司后
  退保时不仅不给利息,反倒要扣除一多半的保费?为此,罗女士起
  诉至法院,只以保险代理人有欺诈行为以及投保的保费超出了自己
  的经济承受能力为由,要求全部退还保险费。
                                   29

                国内案例:
          投资连结保险金额的确认

• 被保险人谢某在2000年7月31日投保10份平安世纪理财投资
  连结保险,每年交保费12060元,交费期25年,保险期限为
  25年,总保额为34万元。同年I1月1日,谢某在过马路时不
  幸被车撞倒,1个月后因医治无效不幸死亡。
• 平安世纪理财保险按条款中规定;第一年的保费全部用于被
  保障人的生命保障,一年后如果被保险人发生意外死亡事
  件或全残,将在本人保障金额和投资账户价值总额中取金
  额较大者进行理赔。据此谢某的女儿即被保险人指定的收
  益人向保险公司提出51.6万元的保险金给付请求。
                                                                    30

   Summary of Features of Different
    Types of Life Insurance Policies

                 Term         Whole       Variable   Universal
Period of        Temp.        Perm.       Perm.      Perm.
   Protection

Premium          Fixed /      Fixed       Fixed      Flexible
   Flexibility   increasing                          after 1st yr

Death Benefit    Level        Fixed       Depends    Level /
  Flexibility                                        increasing

Cash Value       None         Scheduled   Depends    Depends
                                  31



Life Insurance Comparison Chart
                                                      32




                           Annuity Contracts

• Large and growing part of life insurance business

• Divide contract period in two
   – Accumulation period
      • Policyholder pays premiums

   – Payout period
      • Insurer makes payments
                                                               33




                               Use of Annuities
• Risk management perspective
   – Protection against outliving resources (longevity risk)
• Savings perspective
   – Tax advantaged method of saving
      • Implicit returns are tax deferred
   – Fixed annuities
      • Return credited varies with interest rates
   – Variable annuities
      • Return credited varies with return on mutual funds
        chosen by contract holder
                                                                              34




           Overview of Annuity Contracts
Characteristics          Variations
Premium payments         (a) Single premium
                         (b) Fixed period, level premium up to an advanced age
                         (c) Flexible premium over time
Annuity benefits begin   (a) Immediately
                         (b) Deferred
Annuity benefits end     (a) Fixed number of years
                         (b) Death of one of more individuals
                         (c) Combination of (a) and (b)
Insurer payments         (a) Fixed
                         (b) Vary with interest rates, with guaranteed minimum
                         (c) Vary with returns on stock and bond funds chosen by
                             policyholder
                                                                      35




   Chapter 17: Contractual Provisions
Nearly every family buys life insurance; yet few policyholders ever
read a life contract with any effort to understand its provisions.
                  Mehr and Gustavson, Life Insurance, 4th edition.

  •   Standard Contractual Provisions
  •   Dividend Options
  •   Surrender Options
  •   Settlement Options
  •   Other Life Insurance benefits (Riders)
                                                          36




      Standard Contractual Provisions

•   Ownership clause
•   Incontestable clause: 2 years
•   Grace period: 30 or 31 days
•   Cooling-down period:
•   Exclusion and restrictions:
    – Suicide clause, war exclusion, aviation exclusion
• Reinstatement clause (保單復效)
• Beneficiary designation (指定受益人)
                                                                  37




 Reinstatement (保單復效) Provision

• Due to nonpayment of premiums, a policy may
  lapse, either deliberately or unintentionally.
• Reinstatement clause allows policyholders to
  reinstate a lapsed policy so that it is restored to its
  original status and its values are brought up to date.
• Insurers require:
   –   All back premiums must be paid
   –   Interest on past-due premiums may be required to be paid
   –   Insured may be asked to prove insurability.
   –   Must reinstate within 3 (or even 7) years after lapse.
                               38

      国内个案:保险合同复效后,
        合同效力是否重新起算?

• 王某为自己投保了一份终身寿险保单,合同成立并生
  效的时间何为1999年3月1日。因王某未履行按月交纳
  续期保费的义务,此保险合同的效力遂于2000年5月2
  日中止。
• 2001年3月1日,王某补交了其所拖欠的保险费及利息
  。经保障双方协商达成协议,此合同效力恢复。2002
  年1月10日,王某自杀身亡,其受益人便向保险公司提
  出给付保险金的请求。

• 保险公司认为:

• 王某家属认为:
                                                      39




                                   Beneficiaries

• What is a beneficiary (受益人)?
 –“a person, other than the insured or his personal
  representative, to whom or for whose benefit
  insurance money is made payable.”
• Who Makes the Designation?
 –Insured (被保人)- UK
 –Policyowner (保單持有人)- US
   • Think of key employee life insurance
                                                             40




                   Beneficiary Designation
                Priority of Entitlement
• Primary beneficiary
   – Proceeds distributed in equal shares unless
     otherwise specified (per capita)
• Secondary (Contingent) beneficiary
   – multiple levels of contingent beneficiaries permitted
• Effects of Divorce
   – (Common Law Jurisdictions) Divorce of insured
     and named beneficiary does not automatically
     revoke beneficiary designation
   – Quebec
                                41

              国内个案:
      离婚是否影响受益权的行使?

• 王某为某小学学生,2001年6月参加了学校集体投保的
  学生意外伤害保险。保险金额为1万元,投保时未指定
  受益人。王某的父母已于1999年离异,王某一直与母
  亲一起生活。2001年10月20日王某与母亲乘车途中发
  生车祸,母子二人双双身亡。根据保险条款规定,保
  险公司应给付保险金1万元。几乎同时,被保险人王某
  的外公与其生父各自向保险公司申请领取该笔保险金
  ,遂引起争议。

• 王某的生父认为:

• 王某的外公认为:
                                                      42




     Example: Beneficiary Succession
• Debbie takes out a $150,000 life policy on her
  life and establishes the beneficiary designations
  as follows: her husband, Rob, is to receive the
  full benefit; if he predeceases her, her two
  children are to share equally in the benefit; if
  her husband and both her children predecease
  her, the benefit is payable to the Chinese
  University of Hong Kong, her alma mater.
                                   43

         国内个案:立遗产分配遗嘱
         是否可以实际变更受益人?
• 1999年3月,陈某向保险公司投保了10万元递增养老保险,指
  定其大儿子为受益人。2001年5月,陈某因患肾癌病情恶化,
  临终前,陈某考虑与大儿子同父异母的小儿尚未结婚,于是
  立下书面遗产分配遗嘱,其中规定将保险金的受益人改为小
  儿子,并特地请村委会向保险公司证明。次日,陈某去世。
• 2001年6月,陈某的大儿子持相关保险资料及陈某的死亡证明
  向保险公司提出了索赔,保险公司经审核,认为属于保险责
  任,决定给付身故保险金。就在这时,保险公司又接到了陈
  某的小儿子要求给付保险金的申请。陈某的小儿子在提出申
  请时向保险公司提交了盖有村委会证明印章的陈某生前的书
  面遗产继承遗嘱。

• 陈某的大儿子认为:

• 陈某的小儿子认为:
                                                          44

  Beneficiaries: Special Situations
                         Simultaneous Death

• If the insured and the primary beneficiary
  die in the same accident, it is presumed that
  the insured died last.
• (Who gets the money?) Alex names his son Bob
  the only beneficiary. Alex and Bob die in a car
  accident. Alex’s wife claims that she should be
  entitled the death benefit since she is the
  deceased’s estate (遺產繼承人). Bob’s wife claims
  the death benefits should be paid to her since she is
  the beneficiary’s estate.
                                                                    45

  Beneficiaries: Special Situations
               Common Disaster Provision
• The primary beneficiary should outlive the insured
  by a definite period of time, such as 10 days, or it is
  still assumed that the insured died last.
• Ex: (Who gets the money?) Alex and Betty, his wife by a
  second marriage and primary beneficiary of his $100,000
  life insurance policy, are both killed in a car accident. Betty
  survives Alex by only 24 hours. Alex has a child Carl from
  his first marriage. Betty also has a child David from her
  first marriage.
  – With Common Disaster Clause:
  – Without Common Disaster Clause:
                                                               46




      Standard Contractual Provisions
• Policy loan provision
   – Nature: the policyowner can borrow the cash values.
   – Advantages: a low annual percentage rate; no paperwork;
     flexibility in repaying
   – Disadvantages: heavy borrowing may cause policy to
     lapse; the amount of protection is reduced.
• Automatic premium provision
   – Nature: allows overdue premiums to be paid by borrowing
     from the cash value at the end of the grace period
   – Purpose: to prevent the policy from lapsing
   – Main disadvantages: may be overused; amount of
     protection is reduced.
                                                 47




       Riders and Other Optional Benefits

•   Waiver-of-premium,
•   Disability income,
•   Guaranteed insurability (purchase) option,
•   Accidental death benefit,
•   Accelerated death benefit,
•   Cost-of-living rider
                                                                 48




          Riders: WP and Disability Income
• WP: inexpensive or even free
• Become total disabled before some stated age, such
  as 60 or 65.
• Total disability: During the first 2 (or 5) years, it means
  that the insured cannot perform all duties of his or her
  occupation. After that, it means that the insured cannot
  engage in any occupation reasonably fitted by education,
  training and experience.
• Ex: Dr. Yeh is a chemistry professor who has throat cancer
  and cannot teach. If he can find some other job for which
  he is reasonably fitted by training and education, such as a
  research scientist for a chemical firm, he would not
  considered disabled after 2 years.
                                                               49




        Rider: Guaranteed Purchase Option

• Permits the insured to purchase additional amounts of
  life insurance at specified times in the future w/o
  evidence of insurability.
• Ex: Paul, age 28, purchases a HK$200,000 life policy with
  a guaranteed purchase option and becomes uninsurable after
  the policy is issued. Assuming he elects to exercise each
  option, he would have the following amount of insurance:
   –   Age 28                    HK$200,000 (basic policy) +
   –   Age 31                    HK$200,000
   –   Age 34                    HK$200,000
   –   Age 37                    HK$200,000
   –   Age 40                    HK$200,000
   – Total insurance at age 40   HK$1,000,000
                                                              50




            Rider: Accidental Death Benefit

• Doubles the face amount of life insurance if death
  occurs as a result of an accident.
• Also know as double indemnity.
• Additional premium is relatively low, but some
  CFPs don’t recommend it, since:
   – Economic value of a human life is not doubled if death
     occurs from an accident.
   – Most people will die as a result of a disease and not
     from an accident.
   – The insured may be deceived and believe that he or she
     has more insurance than is actually the case.
                                                                51




        Rider: Accelerated Death Benefit

• Also known as a living benefit rider.
• Allows insureds who are terminally ill to collect
  part of all of their life insurance benefits before
  they die.
   – Terminal illness (24 months or less) rider; Catastrophic
     illness rider; or long-term care rider
• Ex: Betty, age 59, who is terminally ill with cancer,
  requests 50% of her $1,000,000 life policy. After the
  benefit is discounted for interest, she receives $462,960.
  After the payment is made, premiums are reduced to 50%,
  and the face amount is reduced to $500,000.
                                              52




               Rider: Cost-of-Living Rider

• Allows the insured to purchase additional
  insurance amount equal to the percentage
  change in the consumer price index (CPI)
  w/o evidence of insurability.
• Decline CPI?
                                                              53




 Nonforfeiture (Surrender) Options

• Take cash value
  – Surrender of the policy
  – Not a good option for cash needs
• Use cash value as a single premium for
  – Reduced paid up whole life
     • Appropriate option for a retiree with limited income
       who still has some life insurance needs
  – Extended term insurance policy
                                             54
            Nonforfeiture Options
(Dollar Amount for Each $1,000 of Ordinary
      Life Insurance Issued at Age 21)
                                            55




                       Settlement Options

• One lump sum cash payment
• Interest option
• Installment option
  – Fixed-period
  – Fixed-amount
• Life income option
  – Life income with period certain
  – Life income with a refund
                                         56
         Fixed-Period Option
(Minimum Monthly Income Payments per
  $1,000 Proceeds, 3 Percent Interest)
                                         57
         Life Income Options
(Minimum Monthly Income Payments per
  $1,000 Proceeds, 3 Percent interest)
                                                               58




          Example: Settlement Option
• Which settlement option should be selected?
• (A) Helen, a childless registered nurse in good health,
  has just become a widow at the age of 24. She is the
  beneficiary of a HK$400,000.
• (B) Mary, 57, is a housewife with 2 dependent college-
  age children whose husband died last week. She is the
  beneficiary of a HK$1.2 million life insurance policy.
• (C) Walter, 87, is a widower with few financial resources
  who lives in a retirement home and is the beneficiary of a
  HK$4 million policy insuring his late daughter.
                                                               59




 Chapter 18: Buying Life Insurance

When you buy life insurance, it’s relatively easy to compare
first-year premium. But that figure tells you nothing about
what the policy will cost over the long run.
                               ---- Consumers Union
• Insurance costs comparisons

• Taxation of Life Insurance

• Shopping for Life Insurance
   – How to be a savvy consumer?
                                                                                   60




   Term Insurance Cost Comparisons
                                                    20         20


• Traditional net cost method:
                                                    åP -åD
                                                    t =1
                                                           t
                                                               t =1
                                                                      t   - CV20

• Adjusted cost index                                            20
   – Idea: calculate accumulated future value of all costs
   – Procedure
      •   accumulate premiums (P) per $1,000 of coverage
      •   less policyholder dividends (D)
      •   for 20 years
      •   at a 5% interest rate
   – 20-year Accumulated Cost (AC20):
                    20                       20
                                 20-t +1
            AC20 = å Pt (1.05)             - å D t (1.05)20-t
                    t =1                     t =1
                                                                          61




      Whole Life Cost Comparisons
• Another approach: use adjusted cost index again
   – but subtract cash value (CV) at end of 20 years
   – AC20* = AC20 - CV20
   – In practice adjust cost indices are scaled to get interest
     adjusted cost (IAC):
      • Net payments index
                                                                   20

                                                               å
                                20
      (assuming not terminate the policy) IAC = AC /
                    20
                      =                t
                                             20   20             1.05 t
                                 =                                 t =1
      • Surrender cost index                            20
      (take cash value into account) IAC 20 = AC 20 /
                                         *       *
                                                        å 1.05 t
                                                        t =1
                                                              62




  Example: Cost of Life Insurance
• Assume a US$10,000 ordinary life insurance
  policy issued to a female, age 20, is $132.10.
  Estimated dividends over a 20-year period are
  $599, and the cash surrender value at the end of
  twentieth year is $2,294.
• The annuity due factor at 5% interest rate is 34.719. ($1
  deposit at the beginning of each year at 5% interest will
  be accumulate to 34.719 at the end of 20 years.)
• What is the average cost per year according to the
  three methods mentioned above?
                                           63




Exhibit 18.1 Traditional Net Cost Method
                                    64



Exhibit 18.2 Surrender Cost Index
                                      65



Exhibit 18.3 Net Payment Cost Index
                                                        66




Universal Life Cost Comparisons
• More complex

• One approach:
  – Use interest adjusted cost index subtracting an
    estimate of cash value
     • under common assumptions(across policies being
       compared) about premiums and interest rates

• No consensus exists
                                         67


   Exhibit 18.4 Comparison of Life
Insurance Costs for Selected Companies
                                                       68



Rate of Return on Saving Component

• The annual rate of return earned on the
  savings component of a policy is an
  important consideration if you intend to
  invest over a long period of time
• The Linton yield is the average annual rate
  of return on a cash value policy if it is held
  for a specified number of years
   – Current information is not readily available to
     consumers, so the method has limited use
                                                                     69



Rate of Return on Saving Component

• The yearly rate of return method is based on a
  formula:
     amount available in the policy   assumed price of the 
     at the end of the policy year  +  protection component
                                                           
                                                            -1
                amount available in the policy 
               
                at the beginning of the policy year 
                                                     
                                                    


• The information needed for the calculation is
  readily available to consumers
                                               70
Exhibit 18.5 Average Annual Rates of Return for
       109 Cash-Value Policies by Year of Policy
                                                                                    71




             Shopping for Life Insurance
•   Determine whether you need life insurance
•   Estimate the amount of insurance needed
•   Decide on the best types of insurance for you
•   Decide whether you want a policy that pays dividends
    – Nonparticipating policy: guaranteed net cost and lower initial outlay
    – Participating policy: better buy in the long run if interest rates are high
• Shop around for a low-cost policy
• Consider the financial strength of the insurer (rating)
• Deal with a competent agent
                                72



Exhibit 18.6 Benchmark Prices
                            73




        寿险公司破产怎么办?
• 小魏刚刚参加工作,最近经常从报纸上看到一些大公
  司、大企业破产的消息,由此她想到一系列问题:寿
  险公司用于支付保户的保险金从何而来?假如某个经
  营寿险的保险公司由于经营不善或是到期不能支付被
  保险人的保险金的话,就会同样存在破产的问题,那
  幺寿险公司的客户怎么办?有没有相关的条文呢?
                                         74




                  Causes of Insolvency

• Non-life insurance
  – Premiums too low
  – Catastrophic losses


• Life Insurance
  – Drop in asset values
  – Bank run
                         75

  No. of insolvencies
In the U.S. (Non-life)
                                       76




No. of insolvencies in the US (Life)

				
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