Please enable JavaScript.

Coggle requires JavaScript to display documents.

FDA & IA (Fixed Deferred Ann (Pricing considerations (Surplus strain…

- - - - FEL
      - surrender charges: FPDA % of premium
    - - Qualified => tax deferral like 401(k) => pre-tax funding
      - Non-qualified => premiums are paid with after-tax income
    - - SP: guarantee a higher for first 1-7 years
      - FP: guaranteed for 1 year (specific to each deposit)
    - - Persistency bonus: bonus crediting rate
      - Bonus for Large AV
      - Annuitization bonus: raise AV by pct
  - - - rising rates: => higher lapses, lower asset values
      - surplus in a short-straddle position
      - C-3 risk; disintermediation risk => risk charges
    - - generally not significant
      - do not use life mort. table
    - - no UW => low acq. cost
      - low admin complexity => low maintenance exp
      - lower than life
    - - FY comm
      - Reserve increase
      - Req. capital for solvency or ratings
      - Low IRR but high profit margin
    - - IRR
      - Break-even year
        
        => more important for DA
        
        Ideally, occur before end of Surr Chrg period
      - Profit margin