Academic - Snippets

  • The Subject of Life Insurance is one that everyone will discuss sooner or later.

  • Fortunately, nearly everybody knows something about it, but unfortunately many who buy it and some who sell it have only a superficial  knowledge.

  • Even those who legislate controls or propose reforms for the  business are not always sufficiently informed.  (p1)

1961 - Book - Modern Life Insurance, by Robert I. Mehr

  • Transparency is a concept imported by Spencer Kimball. Hart Hearings, supra 28, at 1086·1237, 1087·1088 - (testimony of Spencer Kimball);

1980-2, NAIC Proceedings

  • Task Force on Life Insurance Disclosure System - LIDS - NAIC  ---  [BonkNote]

  • I am William C. Scheel, Associate Professor of Finance and insurance, University of Connecticut, Storrs, Connecticut.

  • My remarks today are my own; they are uncompensated and may only coincidentally be views shared by anyone else.

  • Introduction

    • During my last encounter with this task force, I questioned whether the group was just playing another game of Dungeons and Dragons.

    • The Chairman assured me that; indeed, pink worms, gnomes, Merlin and ghouls were not on the Committee's agenda and that we would soon be witnessing the claims of what has proven to be the best D&D game in town for the last decade.

    • Never in my wildest imagination did I think we would be handed by this task force the single most important regulatory proposal in life insurance and annuities -- ever!

    • The Life Insurance Cost Disclosure System (LIDS) is, indeed, a crowning achievement. It breathes new life into this creaky mechanism we call state insurance regulation.

      • Some of us who have lost the faith can only humble ourselves and marvel at this reinstatement of independence and new found strength of state insurance regulation.

  • LIDS clearly heralds a re-emergence of bold initiative and is an historical turning point. In the words of a well-known celebrity: "How sweet it is."

1981-4, NAIC Proceedings

  • After the introduction of indexation, this was no longer a problem except for some "tricks"

  • e.g.,  At one point, indexation was only semi-annual and not monthly, so people took policy loans one day after the indexation day and repaid the loan prior to the next indexation day.

    • They made a lot of money out of these transactions.

--  Dr. Kahane, not a member of the Society, is Associate Professor and director of the insurance center at Tel Aviv University.

1982 - SOA - The Experience of Living Under Sustained Inflation, rsa82v8n19 - Society of Actuaries - 18p

  • The Mechanics of Universal Life Policies

  • Once the policy is activated, the term policy and the accumulation account each operate independently.

1985 - AP - Universal / Variable Life Insurance Policy Purchase Decisions, by Stephen P. D'Arcy and Keun Chang Lee - 58p

  • The interest rate sensitivity of UL policy cash values, amplified by the corresponding cost of insurance sensitivity with declining interest income, suggests UL has always been a simple question of Duration.

2011 - AP - Universal Life Insurance Duration Measures, by David Lange, Peter Alonzi and Betty J. Simkins - 14p

  • 2020 - AP - Exploring Universal Life Insurance - Actuarial - 47p

    • digital.wpi.edu/concern/student_works/p2676z121?locale=en

      • Exploring_UL_Policy_Example.xlsx

      • Universal_Life_Lesson_Plan_.pptx

    • Abstract

    • This project focused on exploring Universal Life insurance by learning about its history, components, and process of reserving.

    • To conduct our research, we read several textbooks, study notes and a Valuation Manual.

    • We then created an Excel deliverable of a theoretical UL policy, created a Lesson plan about UL to teach to actuarial students, and a paper that explains the ins and outs of UL from a consumer standpoint and how the mechanics of a UL policy would work for a potential policyholder.

  • (p4-5) - 2.1 Substantial Lapsing

  • LIMRA, a large life insurer trade association, and the Society of Actuaries define an insurance policy lapse as "termination for nonpayment of premium, insufficient cash value or full surrender of a policy, transfer to reduced paid-up or extended term status, and in most cases, terminations for unknown reason" (LIMRA 2011A, P. 7).

  • As Figure 1(a) shows, 29% of permanent insurance policyholders lapse within just three years of first purchasing the policies; within 10 years, 57% have lapsed.

    • In particular, nearly 88% of universal life policies, a popular type of permanent insurance, do not terminate with a death benefit claim.

2021 (Update) - AP - Lapse-Based Insurance - American Economic Review, 111 (8): 2377-2416, by Daniel Gottlieb and Kent Smetters - 101p