BU483 Lecture Notes - Lecture 6: Swiss Re, Life Insurance, Reinsurance
Document Summary
Bu483 lecture 6 (life insurance & health insurance) H(cid:455)potheti(cid:272)al ituatio(cid:374): all(cid:455) a(cid:374)d ja(cid:374)e ha(cid:448)e a (cid:271)usi(cid:374)ess. Another situation: jane and sally want to get a life insurance policy, so they decided to get a buy-sell agreement. The buy and sell agreement is a life insurance policy on each other and is sometimes used to fund the purchase of members shares. These business shares are sold according to a predetermined formula: buy and sell agreement occurs when: Sally: death, disability, dispute/disagreement, hotgu(cid:374) (cid:272)laus ag(cid:396)ee(cid:373)e(cid:374)t allo(cid:449)i(cid:374)g one partner to put a price on the table. The othe(cid:396) pa(cid:396)t(cid:455) (cid:272)a(cid:374) take the (cid:373)o(cid:374)e(cid:455) o(cid:396) (cid:373)at(cid:272)h of the offe(cid:396) All(cid:455)"s poli(cid:272)(cid:455) i(cid:374)(cid:272)luded: sally was the policy holder, the beneficiary was sally. This is to (cid:271)e do(cid:374)e (cid:449)ithi(cid:374) the (cid:374)e(cid:454)t. Jane has 2 choices: accept the agreement, jane could in turn buy sally out. Jane and sally really value their new employee named kathy. Kathy is the key to the businesses success.
