Special investment account
General investment account
Both A & B
None of the above
Answer is Right!
Answer is Wrong!
The correct answer is: A. Special investment account.
A policy reserve is a fund that is set aside by an insurance company to pay for future claims. In traditional cash value policies, the policy reserve is invested in a special investment account. This account is separate from the general investment account of the insurance company, and it is not subject to the same risks as the general investment account.
The policy reserve is a valuable asset for policyholders, as it provides a cushion against future losses. It also allows policyholders to borrow against the value of their policy, and it can be used to pay for policy expenses such as premiums.
Here is a brief explanation of each option:
- Option A: Special investment account. A special investment account is a fund that is set aside by an insurance company to pay for future claims. In traditional cash value policies, the policy reserve is invested in a special investment account. This account is separate from the general investment account of the insurance company, and it is not subject to the same risks as the general investment account.
- Option B: General investment account. A general investment account is a fund that is used by an insurance company to invest its money. This account is not subject to the same restrictions as a special investment account, and it is therefore subject to more risk.
- Option C: Both A & B. This option is incorrect, as the policy reserve is only invested in a special investment account.
- Option D: None of the above. This option is also incorrect, as the policy reserve is a valuable asset for policyholders.