Lapse-Based Insurance

  • 2023 1130 - NAIC - Proceedings - NAIC/Consumer Liaison Committee - https://content.naic.org/sites/default/files/national_meeting/31_MinutesPacket-Consumer.pdf
    • 9. Heard a Presentation on How Much Life Insurance Purchased in the U.S. Becomes a Death Claim
      Richard Weber (Consumer Representative) provided a presentation based on the paper Lapse-Based Insurance,
      published in 2016 and updated in 2021. The paper was written by David Gottlieb (London School of Economics
      and Wharton School, University of Pennsylvania) and Kent Smetters (Wharton School, University of Pennsylvania).
      Weber said most individual life insurance policies lapse before expiration. Weber said over 70% of U.S. families
      own life insurance, and annual premiums exceed $110 billion. Weber said between 1990 and 2010, there were
      $30.8 trillion in life insurance issued and $24 trillion in life insurance lapses. Weber said 25% of permanent
      insurance policyholders lapse within just three years of first purchasing their policies, and 40% lapse within 10
      years. Weber said nearly 88% of universal life policies ultimately do not terminate with a death-benefit claim, and
      almost 85% of term policies fail to pay a death claim.
  • 2016 – AP – Lapse-Based Insurance, by Daniel Gottlieb and Kent Smetters – 83p
    • This paper was previously titled “Narrow Framing and Life Insurance.”
  • 2021 (Update) – AP – Lapse-Based Insurance.  American Economic Review, 111 (8): 2377-2416, by Daniel Gottlieb and Kent Smetters – 101p
    • 1996 - SOA - A Long-Term-Care Status Transition Model -1996 Bowles Symposium by Jim Robinson, the-old-age-crisis-actuarial-opportunities-the-1996-bowles, Society of Actuaries - 8p
    • 1998 - SOA - Current Issues in Product Pricing, rsa98v24n3133pd - Society of Actuaries - 20p
      • 24(3): 1 - 20 - Mark F. Mahoney, A. Micheal McMahon, and A. David Pelletier
    • Howard, Kevin, 2006. “Pricing Lapse Supported Products: Secondary Guarantee Universal Life,” Presentation to the October 2006 Annual Meeting of the Society of Actuaries, session titled “Pricing Lapse Supported / Lapse-Sensitive Product
    • LeBel, Dominique, 2006. “Pricing Lapse Supported / Lapse-Sensitive Products.” Presentation to the October 2006 Annual Meeting of the Society of Actuaries, session titled “Pricing Lapse Supported / Lapse-Sensitive Products.”