For a 55-year-old with an endowment policy, what is the percentage reduction in payouts for every year they exceed the age limit?

The percentage reduction in payouts for a 55-year-old with an endowment policy is typically set at 2% for every year they exceed the age limit. This reduction is a common practice in insurance to adjust for the increased risk associated with older ages, reflecting the statistical likelihood that the policy will be claimed as the policyholder ages.

Endowment policies are designed to pay out either on a specific date or upon death, and as the policyholder gets older, the insurer may anticipate shorter remaining life expectancy, prompting this reduction in payouts. Therefore, the steady 2% decrease aligns with actuarial evaluations that balance the risk for the insurer against the financial obligation to the policyholder. This is a standard approach to ensure that the policy remains aligned with the expected life stage of the insured, hence supporting the conclusion that the correct answer is 2%.