Policy Mechanics – Cash Flow – Page 3

4 Percent Chalke and Davlin point out that a policy that provides whole life benefits assuming 10 percent interest is not a whole life plan if the guaranteed cash value is only 4 percent. Such a plan is term insurance only for a period of years. — Thomas G. Kabele 1983 – SOA – Universal Life…

Value Cash Surrender Values Cash Value Cash Value Life Insurance Surrender Values Valuation Manual – NAIC Value at Risk – (VAR) Chapter 9 Elizur Wright “Value” – extended term (p153) – he = Patrick Brockett, Plaintiff Expert Witness And he identified the fact that sometimes when the market performs lower, the policy has less value.…

Works Policy Mechanics / Cash flow Starters – Policy Cash Flow Mechanics Until the buyer understands how the product works, attempts to compare price are essentially meaningless. 1972 – SOA – Life Insurance and the Buyer by Anna Rappaport, Society of Actuaries – 2p-Article The fact that we charge people fees that we have disclosed…

Net Amount at Risk (NAAR) ALSO KNOWN AS: Sum at Risk Company Insurance Value – CIV – (Elizur Wright) Term Insurance

Policy Loans Loans LIRP – Life Insurance Retirement Plan Chris H. McElvaine: …I heard another policyholder at the annual meeting mention that he has taken advantage of his 6% policy loan provision. He has reinvested that money with the same company in an RRSP five-year interest certificate bearing a phenomenal rate of interest. Apparently he…

Surrender Values Development of Life Insurance Surrender Values its the United States, J. David Cummins, S.S. Huebner Foundation, for Insurance Education (p1177) – By Mr. MCGUIRE: A. I have parted with two or three life insurance policies. Q. Sell them for the amount of the loan, or at a discount? A. at the price the…

Coverage Period Coverage Period – Examples As long as you pay the premium g. Clarifying “Coverage Period Description” The Working Group discussed what information is intended to be included. Mr. Yanacheak said this is intended to capture how long a policy’s term is—a term of years or for life. Mr. Birnbaum said it is intended…

COI – Cost of Insurance Until the buyer understands how the product works, attempts to compare price are essentially meaningless. 1972 – SOA – Life Insurance and the Buyer by Anna Rappaport, Society of Actuaries – 2p-Article Maybe we can jiggle a bit with our cost of insurance rates. — MichaeI R. Tuohy, [Bonk: Tillinghast] 1985 -…

Interest Sensitive Life Insurance 8. The growth of interest-sensitive insurance products, such as universal life, spurred by a period of high inflation and historically high interest rates. 1984-1, NAIC Proc. Other interest-sensitive policies include variable life, adjustable life and variable premium life. In variable life policies, the assets (typically equities) underlying the policies are held in…

Insufficient Premiums Premium Considerations The non-guaranteed premium concept can be utilized for all forms of nonparticipating insurance, including both term and permanent policies. In setting insurance premiums, the actuary can use pricing assumptions that are as realistic as possible. The actuary is not locked into “50 years” of insufficient premiums if his or her estimates…