Premium Per Thousand

  • First, the average premium per thousand is going down as a result of companies introducing products based on the 4% valuation interest rate basis.

—  Jesse M. Schwartz

1983 – SOA – Individual Life Insurance, Society of Actuaries – 22p

  • For cost comparison purposes, the natural unit price for insurance is dollars of Premium per thousand dollars of death benefit per year-adjusted as appropriate and cash surrender values.  (p131)

—  1980 0130 – Letter – ACLI to GOV (Senator Howard Cannon (D-NV), Chairman – American Council of Life Insurance, on The FTC Staff’s Responses to Criticisms of the Report on Life Insurance Cost Disclosure – (p130-136)

1979 0710 and 1017 – GOV (Senate) – FTC Study of Life Insurance Cost Disclosure, Howard Cannon (D-NV)   —  [BonkNote]  —  [PDF-592p] 

  • While it is possible to make some sort of cost comparison in these cases on the basis of cost in a given year per $1,000 of net protection, such comparisons apparently can be misleading in some cases when the original policy is an endowment or retirement income policy or a limited payment policy.

1969 – SOA – Life Net Cost Comparisons, Society of Actuaries – 34p

  • I see four major potential problem areas:
  • a. The Model requires various numerical amounts — cash values, death benefits, dividends — to be presented on a “per policy” basis, not on a per thousand or per unit basis.”
  • [Bonk: Model = NAIC Model Life Insurance Solicitation Regulation]

—   Donald B. Maier

1976 – SOA – Cost Comparisons and Policy Language, Society of Actuaries – 16p

  • (p449) – Alan Richards, president and chief executive officer of E. F. Hutton Life Insurance Co: The maximum guideline level premium under TEFRA for a male age 35 purchasing our universal life policy is $15.33 per thousand of insurance.
    • By contrast, the average level premium for participating whole life insurance sold by 25 of our larger competitors is $21.92 per thousand, and that is 43 percent greater.
    • Furthermore-and I find this most interesting-the actual average annualized premium received by Hutton is considerably less than the $15.33.
  • Actually, since TEFRA it has been $9.46.
  • I think these numbers clearly demonstrate that universal life is not an investment.

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