• Traditionally, the investment aspects of a life insurance contract have been secondary to the insurance component. In today's financial marketplace, however, it is no longer the case.
  • All financial intermediaries, including life insurance companies, are in stiff competition for investment dollars; and the investor has become much more sophisticated. (p12)
• In response to the increased investor sophistication, life insurance companies have been changing their products in a number of ways
  • First, they will now pay close to a market rate of return to the policyholder even though the minimum rate of return guaranteed in the contract is still fixed well below market.
  • Second, in many new policies the traditional link between insurance protection and the savings component of a policy has been broken.
  • Third, a type of insurance now available, known popularly as universal life, allows the policyholder discretion as to the timing and the amount of premiums he pays.

1983 0510, 0511 and 0728 - GOV (House) - Tax Treatment of Life Insurance, Pete Stark (D-CA)  ---  [BonkNote]