The correct answer is D. Separation of protection and savings element.
Unbundling of life insurance products is the process of separating the protection element (death benefit) from the savings element (investment component) of a life insurance policy. This allows consumers to choose the level of protection they need and the type of investment they want to make, without being tied to a single product.
Option A is incorrect because correlation refers to the relationship between two variables. In the case of life insurance, the correlation between life insurance and bonds is positive, meaning that they tend to move in the same direction. However, this does not mean that unbundling life insurance products will affect the correlation between life insurance and bonds.
Option B is incorrect because correlation refers to the relationship between two variables. In the case of life insurance, the correlation between life insurance and equities is negative, meaning that they tend to move in opposite directions. However, this does not mean that unbundling life insurance products will affect the correlation between life insurance and equities.
Option C is incorrect because unbundling life insurance products does not involve combining protection with savings. In fact, it does the opposite by separating the two elements.