Today,companies
offer a broad range of guaranteed and non-guaranteed life insurance
policies. A guaranteed policy is one in which the insurer assumes all
the risk and contractually guarantees the death benefit in exchange for a
set premium payment. If investments underperform or expenses go up, the
insurer has to absorb the loss. With a non-guaranteed policy the owner,
in exchange for a lower premium and possibly better return, is assuming
much of the investment risk as well as giving the insurer the right to
increase policy fees. If things don’t work out as planned, the policy
owner has to absorb the cost and pay a higher premium.
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