Policy Mechanics – Cash Flow – Page 4

Policy Performance ….provide illustrations based on different assumptions. This would serve to demonstrate to the consumer the effect on future benefits of changes in assumptions. STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE <ACLI> TO THE NAIC MARKET CONDUCT SURVEILLANCE (EX3) TASK FORCE, June 13, 1988 1988-2, NAIC Proceedings Doc 781 – (p4-5) -…

Surrender Charge Because of the multitude of problems in any application of a prospective method, a retrospective requirement was adopted. It was felt that the most important relationship to the policyholder would be that between the account value and the cash value. This amount, the surrender charge, is the quantity regulated by the Model [Bonk:…

Premium Loan Automatic premium loan A loan provision in a life insurance policy allowing any premium not paid by the end of the grace period (usually 30 or 31 days) to be paid automatically through a policy loan if cash value is sufficient. (p134) 2016 – ACLI Fact Book – 186p J. B. WALKER felt…

Cost of Insurance Maybe we can jiggle a bit with our cost of insurance rates. — Michael R. Tuohy 1985 – SOA -Variable Life Insurnce in Canada and the United States, Society of Actuaries – 24p SOA – Agent – I didn’t know Costs Came Out Commissioner Lyons reported that the working group feels strongly…

Annual Statement This can also allow for a low first-year target premium. On the other side, however, it may cause some difficulties in terms of the annual reporting to the policyholder if, indeed, the policyholder really pays attention to the statement sent to him. — Christian J. DesRochers 1983 – SOA – Universal Life (RSA83V9N212), Society…

Inside Buildup These two meetings, plus the announced intention of some members of Congress and the Treasury Department to consider taxing the inside buildup of cash values, adds a note of uncertainty to our discussion today. — Paul J. Overberg 1983 – SOA – Individual Life Insurance, Society of Actuaries – 22p JULY 19, 1985 Impact of…

Cash Surrender Values My topic this morning is required cash surrender values for Universal Life products. A few of the questions I will address include: What is the status of NAIC activity in this area? What are the prospects of the NAIC adopting the current ACLI nonforfeiture proposal? As I personally do not believe that…

Cost Structure The key to our proof was to bundle the product back up and to look at the guaranteed future benefits. When we did this, we made some interesting discoveries. Perhaps the most important was that the role of the account value and mortality and interest guarantees to define what the policy’s guaranteed death…

Interest Rate Assumptions Grading Interest Rate Risk Low Interest Rate Environment New Money vs Portfolio Money Maybe he is not getting all the disclosure he needs, as far as the continuing benefit is concerned, when the interest rates change from that illustrated. The interest assumption is one that we really struggled with. — Gary P.…

Off-Track / On-Track In essence, the model regulation <Universal Life Model Regulation> assumes that at issue, all universal life policies are permanent plans. The r-ratio is meant to measure the extent to which the policy is “on track” as a permanent plan. Statutory Valuation of Individual Life and Annuity Contracts | 5th Edition Claire, Lombardi…