Since there are no government entities that step in to guarantee liabilities of a life insurance...

Since there are no government entities that step in to guarantee liabilities of a life insurance company should it fail to satisfy its obligations, the pricing terms that life insurance companies offer on policies are related directly to their ____________
a. Total assets
b. Securities and Exchange Commission rating
c. Total liabilities
d. Financial ratings

Pension funds are financed by contributions by
a. The employer

b. The employee

c. The tax system, much like Medicare and Medicaid

d. Both A and B

e. All of the above

Solutions

Expert Solution

Answer is c. Total liabilities.

The main obligation of an insurance company is to meet or pay its liabilities. so, their pricing terms are related directly to their total liabilities so that they can pay out their liabilities. in other words they set the price of policies as such that it will be able to pay out its liabilities.

Answer is d. Both A and B.

Pension funds are financed by contributions by both the employer and employee. generally both employer and employee make the same amount of contribution in the pension fund. amount of employee contribution is some % of his salary and employer match the same amount.

jeff jeffy answered 2 years ago

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