What are the general types of assets in which life insurers are allowed to invest?

Life insurers are subject to specific investment regulations to ensure the stability and security of their operations. The correct answer encompasses a broad range of asset types that insurers can hold, which is critical for their long-term obligations such as paying policyholder claims.

Corporate bonds provide a steady source of income through interest payments, and they are typically rated for safety, offering life insurers a balance of risk and return. Real estate investments allow insurers to diversify their portfolios and can contribute to capital appreciation as well as sustained income through rental income. Corporate stocks can also yield dividends and have growth potential, contributing to the overall performance of an insurer's investments.

Policy loans are significant because they represent funds that the insurer can lend to policyholders against their cash value, which ensures that policyholders have liquidity while still maintaining the policy.

This diverse investment strategy helps ensure that life insurers can meet their long-term liabilities, manage risk effectively, and provide policyholders with confidence in their financial strength. The combination of these asset types reflects both regulatory guidelines and financial prudence needed in the life insurance sector.