In Connecticut, what is the maximum filed interest rate a life insurance policy may have?

In Connecticut, the maximum filed interest rate that a life insurance policy may have is established to protect policyholders and ensure that the rates remain reasonable and fair. The correct interest rate of 8% reflects a balance between providing a reasonable return on cash values while also being sustainable for insurance companies to offer their products.

This regulation is designed to ensure that life insurance companies can adequately reserve funds to meet future obligations to policyholders, while also ensuring that consumers are not subjected to excessively high rates that could diminish their policy's value over time. An interest rate of 8% is seen as a prudent and fair limit that allows insurance companies to operate effectively while still offering competitive returns to policyholders.

The other options present higher interest rates that exceed the established maximum, which would not align with the regulatory framework in Connecticut. Hence, the choice of 8% as the maximum filed interest rate is both compliant with state laws and beneficial for maintaining the stability and reliability of life insurance products.