Univoisal Life Insurance

  • 1982 – SOA – Programs to Conserve Traditional Life Insurance Policies, Society of Actuaries – 18p
    • George R. Dinney:
    • ….the Flexible Premium nonpar policy has already been challenged by regulatory authorities on the grounds that the difference between the guaranteed premium and the current experience premium is a policy dividend.
    • Let us agree on our terms.
    • What I mean by traditional life policies is the life insurance product stereotypes.
      • A stereotype policy is one which is indivisible and wholly defined, by its terms, at issue.
      • Under this heading I would include the American version of “Universal Life” – what I call Univoisal Life. 
    • Univoisal Life has a rigid design structure for ease of compliance with regulatory and tax standards.
    • On the other hand, “true Universal”, based on my original formulation, is modular and completely flexible.
    • The replacement threat presented by Univoisal Life and, contrarily the value of Univoisal Life in defensive terms, can be measured by comparing the premiums for $100,000 of traditional whole life insurance, age 40, with premiums for the analogous Univoisal Life.
      • Traditional (average) – $16.50 M
      • Traditional (best) -15.50 M
      • Univoisal – 9.50 M
    • The Law of Requisite Variety appeals to conventional actuaries who devise complicated problems for which they develop equally complicated solutions.
    • The thesis is diametrically opposed to the concept of “universality”, which aims at simplicity of both problem and solution.