Capstone’s core competency is our ability to evaluate and mitigate the risk of extended longevity. The objective of the algorithm is to reduce the potential for capital or premium calls which can erode an investor’s Total Projected Yield to Maturity resulting from extended longevity.
- Capstone remediates the risk of mortality assessment errors by using an average of three independently produced medical underwriting opinions from qualified life expectancy providers.
- Capstone deterministically prices in an additional twenty-four (24) months of premium reserve to the acquisition cost to extend our premium paying ability.
- The premium reserve is professionally managed to create additional yield to further extend premium paying ability.
- In the event of early maturities, all surplus premiums are retained in trust and managed to ensure Capstone’s ability to absorb any premium exposure on any policy under management subjected to extended longevity.
- The PRM algorithm is not guaranteed as human mortality cannot consistently and accurately be predicted. However, the advisor and investor enjoy the comfort of knowing that Capstone has put safeguards in place at every turn to protect the investor from potential risks.