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Forced Asset Allocation Model

The Forced Asset Allocation Model is a strategy used by insurers to manage how cash values are invested, typically by requiring funds to be allocated across certain asset classes. This approach helps control risk and ensure that investments align with the policy’s goals and risk tolerance.

It can protect policyholders by balancing riskier investments with more stable ones. By managing the asset allocation, insurers can offer growth potential while reducing the chance of major losses.