What would be the advantages and disadvantages of crediting interest on special issues more frequently than semi-annually?
Under an insured pension plan the moneys are placed with an insurance company and pooled with other income and invested, giving the plan the advantages of the company’s diversified investments. Life insurance company investments are controlled by State laws, both as to type of investment and proportion of holdings. In particular, the proportion of their funds which can be invested in common stocks is limited, being prohibited altogether in some States. Investment income of life insurance companies is subject to Federal income taxes at a special tax rate. Insurance companies rely for their investment income mainly on real estate mortgages, corporate securities, income-producing real estate, State and local obligations, and Federal Government obligations.
