What type of policy reserves helps to ensure that life insurance claims will be paid?

Statutory reserves are the correct type of policy reserves that help ensure that life insurance claims will be paid. These reserves are mandated by state regulations and are designed to ensure that insurance companies have enough financial resources to meet their future policyholder obligations, particularly when it comes to paying out claims.

Insurers must calculate their statutory reserves based on expected claims, policy benefits, and assumptions about mortality rates and policy persistency. This requirement assures regulators and policyholders that the insurer maintains a sufficient financial cushion to cover all foreseeable claims, thus providing a financial safety net.

Understanding statutory reserves is crucial for recognizing how insurance companies manage risk and maintain solvency, which directly impacts their ability to pay out claims over time. In contrast, the other reserve types do not have the same regulatory backing or direct correlation to the payment of claims, hence their inclusion as choices may not reflect the same level of assurance concerning claims payment.