Abstract
When one considers the variety of ‘options’ available to policyholders and the large number of lives assured who are in a position to exercise an option, one might be haunted by a vision of legions of operators speculating on the optimum moment at which to make a deliberate choice advantageous to themselves and detrimental to the financial stability of life offices. The fact that offices are prepared to encourage various types of options clearly indicates one of two things, either (a) that the skill of the operators is not held in high esteem, or (b) that the skill of the offices is high enough to overcome intelligent selection by the option-holders. If it were true that the value of any particular option could be accurately stated by a mathematical expression and if the incidence of the exercising of the option were established to universal satisfaction, (b) would be mercifully true. This condition, however, does not hold for many options, and it is this element of the unknown which gives spice to the subject and justification for further comments.
Published Version
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