0
A 501K is an actuarial modeling system developed by NYLEX.
http://www.newyorklife.com/NYL2/pdf/501KActuarialModelingSystem.pdf
It is also an FDA approval to market products in the United States. From my experience it applies to medical products.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
How do you start a 501k?
ask a bank or your employer, they all have different ideas on how to do this.
How do financial markets impact on short term insurance?
Short-term insurance is one of many insurance mediums affected by the financial market. It's no secret that many insurance companies, banks, and other businesses are invested in financial markets. The primary reason is building cash holdings for policy withdraw potentials in the future counterbalancing lagging new sales that may support older policies coming due.Short-term policies are the most economical for many consumers due lower premiums. Often these lower premiums are not sufficient to cover the full policy allowable return withdraw. Enter investments consumer policy premiums towards garnering financial market investment income. If markets decline many insurance policies will be unable to meet consumer commitments in payouts.If financial markets are depressed the potential of securing enough revenue to meet financial obligations to policy holders may fail. The main reason for financial market investments. All insurances are engaged in investments including:Health CareLong-Term CareAutoHome OwnersUniversal LifeShort-Term LifeWorker's CompensationRe-call InsuranceMalpracticeOld Practice and New Practices Funding PoliciesMost sell insurance aggressively as usually there is allowance of using new policy payments to subsidize payouts on older policy cash outs. This feature has been the most stable but dependent on future generations replenishment. Today, some sell annuities, retirement investment and other semi-market engaged market link investments, earnings may be spread out among all insurance companies policy holdings and/or services. Example: an insurance company may earn apple holdings in retirement 501K or IRA investment programs that compensate more than promised results these profits are used to cover insurance cash out on policies.Risks of Insurance Financial Market InvestmentsMost consumers engaged in insurance are actually passive investors unknowing into financial markets. AIG a key insurance company was bailed out in the economic recession 2007 cause of heavy investments in the "Derivatives Market" bubble that completely collapsed - as they're key insurers of many government employees' military and other lesser insurance companies in wholesale insurance products. In fact, many smaller insurance companies were engaged in derivatives - so there is economic concern that if the recession continues with added inflation the likelihood some insurance companies failing is possible.The Future Looming Risks in Insurance IndustryInsurance sales have declined over the past 30 yrs at the same rate of U.S. GDP as more workers inclines more consumers engaged in worker related insurance buying programs too declined. This reduction has seen a more heavy need to invest as to off-set no newer polices supplementing older policies with potential of cash withdraws (such as a Social Security Approach). There is vast concern as many younger worker are not investing in insurance compared to baby boom generation which is a large substantial population - in actual birth ratios comparing baby boom vs the X and/or Y generations is proportionally lower per census of boomer parents.Is insurance Safe future investment?Yes, all insurance companies operate per federal, region and state guidelines. Some have more safer vehicles for consumers in the level of cash holding requirements and amount engaged in investments. Usually, some states with the highest standards or guidelines for operations offer more consumer protections. Also, Insurance companies have rating systems that determine their stability the best are AAA+ but are usually command higher premiums then lower ranked insurance companies. Most insurances go under regular review this is more the due to state requirements - states invested heavy in regulation monitoring offer more worth while security as well as insurance companies that maintain higher ratings. Rating are derived via credit worth, risk assessment and various technical algorithms pending diverse and comprehensive selective data.Note lower rated insurance companies offer the lowest premiums garner more risk to low income consumers that can afford them. Hence concerns as towards financial security engagement limited to lower income only about 32% lower income & lower middle class engage in insurance compared to 30 yrs ago at the level of 48%.
