Guaranteed Maturity Premium Nonforfeiture Test

Guaranteed Maturity Premium Nonforfeiture Test

• p412 – Enclosure 5 – Guaranteed Maturity Premium Nonforfeiture Test
  • The guaranteed maturity premium (GMP) test is a proposed method fur judging whether or not a universal life product provides guaranteed cash surrender values in excess of prescribed minimums.
  • The GMP test is concerned primarily with the pattern of policy loads and surrender charges. When used in conjunction with a prescribed smoothness of cash value criteria, the GMP test is effective in disqualifying policies with odd patterns of loads or those with high loads over a sustained number of years.
  • The guaranteed maturify premium is calculated as prescribed in the NAIC Universal Life Model Regulation. It is calculated without regard to any minimum premiums required by the company.

1988-2, NAIC Proceedings – Life and Health Actuarial (EX5) Task Force