How Participating Policies Provide Stability for Canadians

3 Jun 2023 · 0 min

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0:25

Short excerpt from a video explaining that insurance companies bear the investment risk for participating (with-profits) funds, ensuring death benefits are paid even if investments underperform. The speaker emphasizes that the insurer cannot gamble with participating fund assets and must protect policyholder benefits.

Biggest thing is that insurance company cannot lose the participating fund. They cannot risk the participating fund because they have to make sure the fund is there. So when there is a death happens, so they have to provide this death benefit no matter what, they cannot put it to risk. They cannot gamble with this cash. So the most important thing is that they assume all the risk. If the bond is not performing well, all the risk with the insurance company.