Permanent Plan
- In essence, the model regulation assumes that at issue, all universal life policies are permanent plans.
- [Bonk: model regulation = ULMR - Universal Life Model Regulation]
- The r-ratio is meant to measure the extent to which the policy is "on track" as a permanent plan.
2018 - Book - Statutory Valuation of Individual Life and Annuity Contracts | 5th Edition, by Donna Claire, Lombardi and Summers
- The 818(c) election is another issue that is being looked at by the Service.
- In the Hutton ruling, the Service specifically took a caveat indicating that they were saying nothing with respect to this issue.
- One question that was discussed briefly was what was the plan of insurance?
- How do you know whether you have a permanent policy that qualifies for $21 per thousand,
- or a term policy that qualifies for $5,
- or perhaps some that qualifies for nothing.
- That is an unanswered question.
-- William B. Harman, Jr.
1981 - SOA - Universal Life (RSA81V7N412), Society of Actuaries - 16p
- 1. Universal Life Insurance Model Regulation - Drafting Note:
- Although highly flexible, universal life insurance is generally considered a permanent life insurance plan.
- Most companies encourage a premium level which will provide lifetime insurance protection.
- Every universal life insurance policy of which the drafters are aware has a “net level premium” that could be computed which would guarantee permanent protection.
- [Bonk: Is this true anymore? ie. Guaranteed Maturity Premium]
- As a result, it is expected that most universal life insurance policies will be sold as permanent plans. (p5)
- [Bonk: Is this true anymore? ie. "r-ratio"]
- The letter “r” is equal to one, unless the policy is a flexible premium policy and the policy value is less than the guaranteed maturity fund, in which case “r” is the ratio of the policy value to the guaranteed maturity fund.
- The guaranteed maturity fund at any duration is that amount which, together with future guaranteed maturity premiums, will mature the policy based on all policy guarantees at issue.
- [Bonk: Is this true anymore? ie. "r-ratio"]
- VM-51: Experience Reporting Formats
- Permanent Plans:
- 010 = Traditional fixed premium fixed benefit permanent plan\
- 011 = Permanent life (traditional) with term
- 012 = Single premium whole life
- 013 = Econolife (permanent life with lower premiums in the early durations)
- 014 = Excess interest whole life
- 015 = First to die whole life plan (submit separate records for each life)
- 016 = Second to die whole life plan (submit separate records for each life)
- 017 = Joint whole life plan–unknown whether 015 or 016 - (submit separate records for each life)
- 018 = Permanent products with non-level death benefits
- 019 = Permanent plans 010, 011, 012, 013, 014, 015, 016, 017, 018 combined (i.e. unable to separate)
- p306 (51-16)
2022 - NAIC - Valuation Manual - 338p
- VM-51: Experience Reporting Formats
- Universal Life Plans (Other than Variable), issued without a Secondary Guarantee:
- 061 = Single premium universal life
- 062 = Universal life (decreasing risk amount)
- 063 = Universal life (level risk amount)
- 064 = Universal life – unknown whether code 062 or 063
- 065 = First to die universal life plan (submit separate records for each life)
- 066 = Second to die universal life plan (submit separate records for each life)
2022 - NAIC - Valuation Manual - 338p