YOU ASK:

What is the definition of Investment Income?

WE ANSWER:

Investment Income refers to the income that is gained from investment activity. For insurance companies, this is one source of their income. The other source of income would be premiums (minus expenses and claims).

For investment income to be generated, the investment amount must get a rate of return in such a way that the revenue is more than the original assets invested. The income may come from capital gains or from dividends obtained in relation to stock ownership.

The insurance company can involve itself in investment instruments such as bond funds, futures options and stocks.

Investment income is also the goal of the fund manager of a retirement plan or an annuity.

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