Life insurers sell savings contracts with surrender options, which allow policyholders to prematurely receive … guaranteed surrender values. These surrender options move toward the money when interest rates rise. Hence, higher interest rates … calibrated model, we then estimate that surrender options would force insurers to sell up to 2% of their investments during an …

Life insurers sell savings contracts with surrender options, which allow policyholders to prematurely receive … guaranteed surrender values. These surrender options move toward the money when interest rates rise. Hence, higher interest rates … calibrated model, we then estimate that surrender options would force insurers to sell up to 2% of their investments during an …