Which of the following is NOT a type of asset allowed for life insurers' investment?

Which of the following is NOT a type of asset allowed for life insurers' investment?

• A. Corporate stocks
• B. Policy loans
• C. Commodities
• D. Real estate

Answer: (C)

Commodities are generally not considered an allowable asset for life insurers' investments due to the high volatility and lack of predictable income stream they provide. Life insurance companies are required to maintain a portfolio that consists of stable, income-generating investments to ensure they can meet their long-term obligations to policyholders. The other options, such as corporate stocks, policy loans, and real estate, can be included in a life insurer's investment portfolio. Corporate stocks provide potential for appreciation and dividends, policy loans allow insurers to earn interest on loans made to policyholders, and real estate can generate rental income and appreciate in value over time. This structure ensures that insurers maintain financial stability while fulfilling their commitment to policyholders.

Commodities are generally not considered an allowable asset for life insurers' investments due to the high volatility and lack of predictable income stream they provide. Life insurance companies are required to maintain a portfolio that consists of stable, income-generating investments to ensure they can meet their long-term obligations to policyholders.

The other options, such as corporate stocks, policy loans, and real estate, can be included in a life insurer's investment portfolio. Corporate stocks provide potential for appreciation and dividends, policy loans allow insurers to earn interest on loans made to policyholders, and real estate can generate rental income and appreciate in value over time. This structure ensures that insurers maintain financial stability while fulfilling their commitment to policyholders.