The Connection Between Mortality Risk and Cash Value Growth in Whole Life

The Connection Between Mortality Risk and Cash Value Growth in Whole Life
0:00 / 0:00

Bob walks through a numerical example to illustrate how increased mortality risk can reduce the “actuarially fair” growth rate in the cash surrender value of a Whole Life policy, even though (by construction in the example) the total expected return, including the possibility of a death benefit payout, is constant throughout the policy. The exercise will help the viewer understand the mechanics of real-world policies.