Modified Premium Whole Life

  • Out of curiosity, I examined Conning and Company's printed studies on twenty-two large stock life insurance companies ...
  • Among those companies showing a more rapid growth in the whole life and endowment account, I found the following changes had transpired between 1961 and 1966:
    •  (2) modified premium whole life policy had been classified as term insurance in 1961 and as whole life insurance in 1966; 

--  Frederick S. Townsend

1967 - SOA - Digest of Discussion of Subjects of Special Interest - Individual Life and Health Insurance, Society of Actuaries - 62p

  •  .....products, the so called "Split Life" product and Modified Premium Whole Life (developed as "Deposit Term" by
  • ... in many disapprovals. So then came: III. Modified Premium Whole Life

1978 - SOA - Individual Life Product Development, Society of Actuaries - 18p

  • In the case of modified premium life insurance which is essentially term insurance followed by permanent, minimum nonforfeiture value requirements shall be determined by applying the Standard Nonforfeiture Law separately to the term coverage period and the whole life coverage period, irrespective of any language in the policy which states that the conversion to whole life coverage is automatic or that the coverage period is continuous.

1979-1, NAIC Proceeding

  • Critical to this approach is the assumption that companies will price their product in a rational manner.
    • Unfortunately, not only is illogical pricing an academic possibility, it has become reality for some companies and products.
    • An excellent example is a "Modified Premium Whole Life" type plan under which ultimate premiums purport to be ''whole life" premiums but which actually are set simply to be sufficiently high relative to premiums in prior years that minimum values will be as low as desired and deferred as long as desired.

To: NAIC (C) Committee Technical Task Force
From: Bradford S. Gile, A.S.A., M.A.A.A., Life and Health Actuary - State of Wisconsin Dept. of Insurance - October 17, 1979
(ATTACHMENT F)  - re: Nonforfeiture Values for Life Insurance Contracts Having Prerniums'which Vary by Policy Duration

1980-1, NAIC Proc.