Q: Why was Universal Life Created?

UL insurance was an industry response to those who planned to “buy term and invest the difference” when interest rates spiked in the late 1970s.

2014 – SOA – Sustained Low Interest Rate Environment: Can It Continue? Why It Matters, Society of Actuaries – 51p

Universal Life was created for Living Benefits, Whole Life is primarily for Death.

2020 0920 – Doug Andrew – 3 Dimensional Wealth – Is Universal Life Vs. Whole Life? – [VIDEO-YouTube-12:23]

2019 0917, NAIC – LIIIWG – Life Insurance Illustrations Working Group – [Bonk: Not in Proceedings]
- Teresa Winer (GA) – I feel like a lot of these policies had good intentions and came out of Buy Term and Invest the Difference to compete with that so people wanted more disclosure of all the components.

(p17) – Prior to the 1980s, insurers sold primarily fixed-premium term and whole-life insurance to individual policyholders.
With competitive pressures significantly reducing sales of whole-life products, insurers had little choice but to innovate in the 1980s to meet demand.
They did so by redesigning whole-life into a hybrid product that included a traditional income protection component and a long-term investment component using market-based yields (and thus were interest rate-sensitive).
- The first of these new complex products, universal life insurance, revolutionized the industry.
- Its popularity was rooted in its flexibility.

2013 – NAIC / CIPR – State of the Life Insurance Industry: Implications of Industry Trends – 220p

2017 1120-?? – NAIC – LIBG, Life Insurance Buyer’s Guide Working Group – Brenda Cude to NAIC – re: 08-18-2017 Draft Life Insurance Buyer’s Guide – 5p – – 6p – [cmte_a_libg_wg_171120_karrol_kitt_brenda_cude_buyers_guide_comments]
- Comment [BJC2]:
  - Permanent insurance is a term used only by the industry – not by consumer educators.
  - We would prefer – Life insurance comes in two basic types: Term and whole life (also referred to as permanent insurance).