Whole Life Insurance Case Study

Improved Essays
2.0 Whole Life Insurance in Malaysia
Whole life insurance is a type of insurance that provide coverage for the policyholder for entire life. It is also known as ordinary life insurance. On the other view, it can be defined as a cash value that provides lifetime protection. (Rejda & McNamara, 2014). In this contract, upon the death of the policyholder, a stated amount will be paid to the beneficiary. There are several types of whole life insurance that are as follow:-
2.1.1 6 Whole life Insurance in Malaysia
1. Variable life insurance
It can be defined as a fixed premium policy (Rejda & McNamara, 2014). Death benefit and cash values vary according to the investment experience of a separate account maintained by the insurer. In this term, the
…show more content…
For example, Standards & Poor’s 500 Index (Rejda & McNamara, 2014). Third, Based on this context, the formula will be provided in determining the amount of the enhanced (additional) of interest to be credited to the policy (Rejda & McNamara, 2014). Moreover, this formula would normally put a cap on the maximum limit of additional benefits to the police (Rejda & McNamara, 2014) and it would charge limits on index-use of the participation rate.
Lastly, in this policy there is misunderstanding by the consumer and is not encouraging performance. A number of experts said base index will decline during the period of weak stock performance compared to regular universal life insurance. As stated earlier, dividends on the S&P 500 index are not included in the measurement of stock market gains because dividends have accounted for a large part of the increase in the S&P 500 index over time (Rejda & McNamara, 2014). Besides that, the formula used for calculate interest rate enhances will apply maximum limits on the cap and highest participation rate.
3. Endowment
…show more content…
A nonparticipating life policy for a lifetime which is based on the present value of death, the experience of the insurer insurance costs and also to venture. Moreover, the nonparticipating policy is a policy that is designed to not pay any dividend. Although current assumptions whole product life are different among companies offering insurance, these companies also share some of the same features such as account aggregation, which reflects the present value under the policy. If it had been delivered, the delivery charge is deducted from the accumulation account. The surrender charges decrease over time will be deducted on account aggregation to determine the current cash value. Minimum cash value is based on high interest rates according to the prevailing market conditions. Minimum cash value is based on the guaranteed interest rates for example 4 or 5 percent. However, the collection account is credited with high interest rates according to current market conditions. For low premium products, it is falling lower than the premium paid at regular nonparticipating whole life policy. Low premiums initially secured for a period of time such as 5 years. For premium products is high, even under the latter category, this policy contains provisions that full premium where a premium is lost after a certain period of time such as ten

Related Documents

  • Improved Essays

    It is essential to list beneficiaries to your 401(k), IRA, etc., because failing to do so will produce income for the estate when the executor closes these accounts. As a result, the amount will exceed the $600.00 threshold forcing the executor to file the estate income tax return. By listing beneficiaries to retirement accounts, the accounts become property of the beneficiaries, not the estate. • Own rental property in joint tenancy. In simple terms, when one owner dies, ownership of the property goes to the surviving joint tenant.…

    • 712 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Simeon Case Study

    • 966 Words
    • 4 Pages

    Therefore ,the liquidity of receivables for Simeon Company is decrease. 3 Inventory turnover =Cost of goods sold Average inventory 2009 $345,500/(($82,500+54,000)/2) = 5.06 times 2010 $411,225/(($112,500+82,500)/2) = 4.22 times The inventory turnover is decrease from year 2009, 5.06 times to 2010, 4.22 times. Therefore , the efficiency of inventory management for Simeon Company is decrease. 4 Days’ sales in inventory =( Ending inventory)/(Cost of goods sold ) X 365 2009 $82,500/($345,500 ) X 365 = 87.16 days 2010 $112,500/($411,225 ) X 365 = 99.85 days The days’ sales in inventory is increase from year 2009 , 87.16 days to 2010 ,99.85 days. Therefore ,the liquidity of inventory for Simeon Company is decrease.…

    • 966 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    The pound fell to a 31-year low against the dollar, which is an alarming sign. Investors have the right to worry because the exit can hurt the investment in the country and the financial sector. Though the pound is dropping against the dollar, investors are leaning towards companies that export goods on the stock market. Since the pound is weaker, companies can increase profits from exporting. However, analysts believe if investment continues to fall within the country the gains on the stock market will be minimal.…

    • 1042 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Retirement Planning Essay

    • 1684 Words
    • 7 Pages

    Some examples of non-distributing marital retirement property would be social security payments, military injury compensation, railroad worker’ retirement benefits, and workers’ compensation disability awards. There are a few different ways to distribute the money that is controlled by the federal law. The deferred distribution approach, the court will retain jurisdiction over the divorce and will wait to distribute the benefits to the parties when they are actually paid to the pensioner. Another pay out method is immediate offset. In this approach you are instantly rewarded an offset amount of marital property to the non-employee spouse, equivalent to their share of the plan, and the entire plan itself is awarded to the employee spouse.…

    • 1684 Words
    • 7 Pages
    Improved Essays
  • Decent Essays

    In order to pay 1Rupee Liability Company has 0.15 rupee asset. On analyzing Acid test ratio of company of 2012, 2011, we can say that Acid test ratio of 2011 was slightly high at 0.13 when compared to other year. This depicts that ability of the firm to convert its current asset into cash is decreasing every year. Therefore the firm would find it difficult to pay its current liabilities. Even L.A/C.L standard ratio is 1:1.…

    • 982 Words
    • 4 Pages
    Decent Essays
  • Superior Essays

    The reacting with their reports like would that is exited will reacts in the company to players at foreign insurences.The life insurances should be reported at Exide industry said at not be discussed above the moments. The Exide life insurances which are distributing ta products through lot of channels like agency, comprisinsg of 35000 advisories are present. The distribution relationship allocated at regional cooperatives bank like corporate agents, brokers, referral partners. It was originally as joint places between Exide life insurances industry, The united life insurances are insurances…

    • 1032 Words
    • 5 Pages
    Superior Essays
  • Improved Essays

    A money purchase plans requires the employer contributions, regardless of the employer’s profits, and the employee may contribute to this plan. An ESOP provides shares of stock, or money to buy the stock of the company to participating employees. A SEP allows the employer to make contributions to individual retirement accounts (IRAs) for each employee, and the amount can vary year to year. A TSP is a pension plan designed for the United States Civil Service employees where the employee will make contributions, and the employer can choose to match the employee contributions, but there is no legal obligation for this to occur. A defined benefit plan states the employer will contribute an exact amount, and the employee will receive a specific benefit retirement, and is provided in the form of an annuity.…

    • 858 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Hence, its interest payment will be lower and its credit and solvency risk will also be lower. Though it has suggested a downward trend on interest coverage from 2014, which shows the margin of safety for the company to pay its current interest payment, its interest coverage is still within a relatively high level. What is noticeable is that MYX shares a high debt to equity ratio, so it may expose to higher solvency risk to repay its liabilities using its equity. Since the ratio has decreased after 2013, MYX has reduced its possible solvency. Accordingly, MYX had repaid all loans in 2012 that debt to equity ratio and interest coverage were invalid during this…

    • 909 Words
    • 4 Pages
    Great Essays
  • Improved Essays

    Analysis Of Wesfarmers

    • 998 Words
    • 4 Pages

    Discuss the problems of measurement in the context of the present AASB / IASB standards and framework using your selected annual report to provide examples? The requirement for a framework is to minimise the risk of measurement. According to the double entry system, equity is calculated as assets minus liabilities. In the classification of financial element, it is important they measured with accuracy and profitability. The problems of measurement are historical cost, which is based on the value which is paid in the past.…

    • 998 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Wages paid to casual employee In this transaction, wages expense will reduce cash balance, which indicates that the element affected is assets. Wages expense will be recorded in the income statement and only appears in the balance sheet once deducting the amount in profit, which additionally also reduces equity. This transaction will be recorded under operating activities and cash outflows in the cash flows statement. 9. Amount borrowed long-term from the bank In the balance sheet, a long-term loan is considered as a liability incurred onto the business.…

    • 759 Words
    • 4 Pages
    Improved Essays