Illustrations and Premium Limits

• The NAIC Life Insurance Illustrations Model Regulation requires a basic illustration to consist of a numeric summary of the death benefits and values on three bases:

Here is an example.

• The policy illustrated below is $100,000 specified amount with a $60 policy load, assessed monthly.
• The guaranteed interest rate is 6% in the first year, 4% in renewal years.
• The issue age is 45 and four risk classes are examined.
• The two numbers listed under 1980 CSO and 2001 CSO are (i) the guaranteed maturity premium or GMP, i.e. that level premium paid at issue and annually thereafter which matures the policy for the specified amount (at attained age 95 in this case) based on contractual guarantees of mortality, interest, loads and charges and (ii) the 20th year cash value, i.e. the cash value at attained age 65.

GMP / Cash Value PY 20
Risk 1980 CSO 2001 CSO Reduction
45 MNS $1,904/$37,954 $1,559/$33,056 18%/13%
45 MS $2,504/$41,017 $2,022/$36,433 19%/11%
45 FNS $1,597/$32,579 $1,279/$26,384 20%/19%
45 FS $1,875/$33,770 $1,761/$32,117 6%/ 5%

2002 06 - Small Talk - A New Platform for Universal Life - ISSUE 18 JUNE 2002  - 16p