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Risk Management of Policyholder Behavior in Equity-Linked Life Insurance

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Figure

Table 1 presents fair fees calculated for the constant fee case under different assumptions for the surrender charge function
Figure 1: Fairly priced VA products with maturity T = 10. Left panel : Surrender charge function
Figure 2: Fairly priced VA products with maturity T = 20. Left panel : Surrender charge function
Figure 3: Minimal surrender charge schedule that completely eliminates the surrender incentive in the constant fee case for a fairly priced VA contract issued to a policyholder age 60
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