Premium – Actuarial – Universal Life

  • The complications begin with a very simple question:
    • What’s the premium for Universal Life?
      • It could be almost anything.
    • Then what’s the cash value?
      • That depends on the premium.
    • It is the relationship between the premium and cash value that determines the product characteristics of Universal Life.

—  Ben H. Mitchell, [Bonk: a consulting actuary with Tillinghast in Atlanta – Years-?]

1981 – SOA – Universal Life (RSA81V7N412), Moderator: Samuel H. Turner, Society of Actuaries – 16p 

  • What UL does, among other things, is to let the policyowner or maybe the agent pick the point on the line between these two promises— pick the point that best fits the situation that the agent or the policyowner is in.
    • He can have a high premium policy with lots of dividends if experience does remain good
    • or he can pay a very low premium but have a big risk of increasing the premium if experience does not turn out so well.
    • One thing this ability does, it opens up the traditional 3-factor dividend formula, the black box, so that some of the workings are exposed.
      • That is the good side, the opening up of the black box.

— Bruce E. Booker

1988 – SOA – Update on Universal Life Reserves and Non-Forfeiture Values, Society of Actuaries – 36p