Financial Product And Benefit Scheme Risks

Question 1

list all financing methods

Answer 1

Pay-as-you-go
Lump sum in advance
Terminal funding
Regular contributions
Just-in-time funding
Smoothed pay-as-you-go

Question 2

Advantage of funding in advance

Answer 2

Security for members
Required by regulation
Tax incentives
Competitors may be funded in advance
Ease liquidity concerns
premium at inception may be reinvested

Question 3

disadvantage of funding in advance

Answer 3

Opportunity cost
Method must be chosen carefully
Not all methods give realistic assessment