Final answer:
Equity-linked insurance combines life insurance and investment features. It offers the opportunity for policyholders to invest their premiums and earn returns based on the performance of a real fund. While policyholders may receive a death benefit equal to the value of their accumulated premiums, the benefits on an equity-linked insurance policy can fluctuate based on investment performance. The correct answer is option (d)
Step-by-step explanation:
Equity-linked insurance is a type of insurance policy that combines the features of life insurance and investment. It allows policyholders to invest their premiums in a real fund and earn a return based on the performance of that fund. Additionally, the policyholder may receive a death benefit equal to the value of their accumulated premiums. Variable annuities, another type of equity-linked insurance, pay the benefit as a lump sum and may offer a guaranteed minimum death benefit (GMDB) and a guaranteed minimum maturity benefit (GMMB).
However, the statement that is not true is option D) Benefits on an equity-linked insurance policy will only increase or stay the same over time. In reality, the benefits on an equity-linked insurance policy can fluctuate based on the performance of the underlying investments. If the market value of the investments decreases, the benefits may also decrease.
Therefore, the correct option is D) Benefits on an equity-linked insurance policy will only increase or stay the same over time.