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Unit-linked assurance policies: category B

  • A. E. M. Fine


The purpose of this note is to summarize and draw attention to the references in the actuarial literature to Category B unit-linked assurance policies.

2. The designation ‘Category B’ was first used by A. T. Grant and G. A. Kingsnorth. In paragraph 53 of their paper the authors define this type of unit-linked policy as one where the policy is linked to a unit trust and dividends distributed by the unit trust are retained for the benefit of the life office and corresponding adjustments are made in the premium scale and in the form of benefit. It is stated that the more usual type of contract in this category takes the form of an endowment assurance under which the sum assured is payable in the units of a unit trust, the amount deemed invested in units each year being equal to the sum assured divided by the original term of the policy. At maturity the policy-holder receives the units (or their cash value) subject to any deduction for capital gains tax.



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(1) Grant, A. T. and Kingsnorth, G. A. Unit Trust and Equity-Linked Endowment Assurances. J.I.A. 1967, 93, 387438.
(2) Bailey, W. G. Some Points on Equity-Linked Contracts. J.I.A. 1962, 88, 319–56.
(3) Ford, A. Assurances Linked to Unit Trusts. J.S.S. 1969, 19, 87102.
(4) Fraser, J. C., Miller, W. N. and Sternhell, C. M. Analysis of Basic Actuarial Theory for Fixed Premium Variable Benefit Life Insurance. T.S.A. 1969, 21, 343457.
(5) Benjamin, S. Formulae for an Equity-Linked Policy Commonly Sold in U.K., Transactions of the Nineteenth International Congress of Actuaries 1972 (Subject 1).
(6) Wilson, A. F. Category B Unit-Linked Policies. 1973. Presented to the Institute of Actuaries Students' Society, 11 December 1973.

Unit-linked assurance policies: category B

  • A. E. M. Fine


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