What Does Bear Market Mean?
A bear market is a downturn in a market in which the price of securities drops for a period of time. Typically, security prices must drop at least 20% for a market to be a bear market. In the context of insurance, bear markets can lessen the cash value of a life insurance policy that has an investment component.
Insuranceopedia Explains Bear Market
Many life insurance policies offer an investment component in order to make the value of the policy grow over time. However, if a bear market occurs, then the value of the investments made with the life insurance policy can go down dramatically. This is the risk for those who wish to have an investment component to their life insurance policies. Bear markets are the opposite of “bull markets.”