Deviation from standard cover is allocated to which fund?

Deviation from standard cover is allocated to which fund?

• A. NFUD
• B. NFUD Plus
• C. NFCD
• D. NFWD

Answer: (A)

When a policy includes deviations from the standard cover, the change in risk and cost is kept separate from the baseline by allocating it to a dedicated fund. This separate fund isolates the extra coverage or adjustments from the standard terms, so the core premium and reserves for the standard cover remain aligned with the expected risk. NFUD is the fund used to handle deviations from standard cover, which is why it’s the correct choice. The other funds are intended for different purposes and not for allocating deviations from standard cover in this context, so they aren’t the appropriate pool for this adjustment.

When a policy includes deviations from the standard cover, the change in risk and cost is kept separate from the baseline by allocating it to a dedicated fund. This separate fund isolates the extra coverage or adjustments from the standard terms, so the core premium and reserves for the standard cover remain aligned with the expected risk.

NFUD is the fund used to handle deviations from standard cover, which is why it’s the correct choice. The other funds are intended for different purposes and not for allocating deviations from standard cover in this context, so they aren’t the appropriate pool for this adjustment.