Life insurance contracts and their influence on investment policy


This work analyzes different life insurance contracts and their influence on the investment policy of life insurance companies. Fact is that every contract closed on life insurance contributes to the growth of total funds of life insurers, which should be used in investing. However, not every contract contributes the same amount of growth to these funds.

The greatest contribution to the accumulation comes from the contracts that contain saving element (whole life, universal life). Contracts that provide only risk insurance and do not contain saving element (term life insurance) are of least importance. The insurer will make the safest inflow through the whole life insurance contract and the other contracts that explicitly define the height of premiums that the insured pays, because that is the best way to predict inflow, as well as the projection of their investments. The insurer will have more difficulties to evaluate inflows of funds and the possibility of their investing at the contracts with greater freedom for the insured considering the payment of more flexible premium.