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Faizan
Actuarial equivalence is the technique of applying a single measurement to two separate benefits plans. These plans can include health insurance coverage, worker's compensation insurance policies or retirement plans. Actuarial equivalence allows plan managers to see how closely the benefits of the two plans match up together. Each type of plan has its own factors and its own calculation tools. Actuarial equivalence calculators use the components of each plan -- such as interest rates, payout rates and policy terms -- to ensure fair comparisons between various benefits plans. Some benefit plans, such as life insurance plans, have online actuarial calculators available that let buyers compare plans side-by-side.
Uses for Actuarial Equivalent Calculation Tools
A corporate benefits plan manager can use actuarial equivalent calculation tools to choose between two company-sponsored life insurance plans. The factors for choosing between the two plans can include average employee life expectancy, return on plan investments, current interest rates and average employee compensation rates. However, the "equivalence" calculations can only serve as rough estimates. The calculations also rely on a wide range of assumptions based on current conditions. These conditions can change from year to year, so plans that appear roughly equivalent one year can undergo major changes the next year.tml
Uses for Actuarial Equivalent Calculation Tools
A corporate benefits plan manager can use actuarial equivalent calculation tools to choose between two company-sponsored life insurance plans. The factors for choosing between the two plans can include average employee life expectancy, return on plan investments, current interest rates and average employee compensation rates. However, the "equivalence" calculations can only serve as rough estimates. The calculations also rely on a wide range of assumptions based on current conditions. These conditions can change from year to year, so plans that appear roughly equivalent one year can undergo major changes the next year.tml
Posted in: Business Insurance
