Exotic Unit-Linked Life Insurance Contracts

THE GENEVA PAPERS ON RISK AND INSURANCE THEORY, Vol. 21 No. 1

Posted: 18 Jun 1996

See all articles by Steinar Ekern

Steinar Ekern

Norwegian School of Economics (NHH) - Department of Business and Management Science

Svein-Arne Persson

Norwegian School of Economics (NHH)

Abstract

This article integrates aspects of traditional insurance with advances in financial economics, yielding proper valuation and premium assessments of insurance benefits linked to various financial assets. Several new types of unit-linked life insurance contracts are discussed with substantial potential for real-life applications. Compared to usual unit-linked products, these contracts offer added flexibility and/or altered exposure to financial risk for the insured and/or the insurer. The single premiums of these policies are calculated as expectations under a risk adjusted probability measure (equivalent martingale measure), satisfying no-arbitrage conditions in financial markets.

JEL Classification: G22

Suggested Citation

Ekern, Steinar and Persson, Svein-Arne, Exotic Unit-Linked Life Insurance Contracts. THE GENEVA PAPERS ON RISK AND INSURANCE THEORY, Vol. 21 No. 1. Available at SSRN: https://ssrn.com/abstract=7527

Steinar Ekern (Contact Author)

Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )

Helleveien 30
Bergen, NO-5045
Norway
+47 477 00 447 (Phone)

Svein-Arne Persson

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway
47-55-95-90-00 (Phone)
47-55-95-96-47 (Fax)

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