Designing a Makerere unit linked insurance product
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One of the issues facing insurance companies in Uganda is the low levels of insurance penetration. To combat this problem, insurance companies have taken some actions, such as using Bancassurance. However, expanding the variety of insurance products to satisfy the various needs ofpotential insurance clients canalsoincrease thelevels ofinsurancepenetration in a nation.Thepurpose of this study was to design a Makerere Unit Linked Insurance Product.The insurance features of this product include a death benefit, a surrender benefit, and a maturity benefit. It was created to offer students investment rewards aswell. On the investment side, each student pays annual premiums, a portion of which is invested in his or her unit fund each year.The universitythenuses the accumulated value at the end of the student's final year of study to cover graduation costs and the remaining amount is left in the student's accounts as discretionary income. It was determined through a profit margin analysis that the product seized to benon-onerous at age 70 and that all ages younger than that had a positive profit margin. The analysis covered a range of ages between 20 and 80 years. Additionally, a sensitivity analysis was performed, and it was discovered that the profit margin was least sensitive to changes in the interest rates of unit and non-unit funds and most sensitive to changes in the allocation rates and expenses. In conclusion,product benefits students, the university, and insurance companies all at once, I therefore advise Makerere Universitytoadopt it because it lessens the issues that arise when it comes to paying graduation charges at the end of the period of study.