Premiums

  • Richard Weber, Merrill Lynch Life ... suggested that the illustration show ... how the policy values are paying the premium.
  • Mr. Morgan said that this issue needs specific attention because many complaints were received in the state insurance departments on this issue.  (p521)

1994-3, NAIC Proceedings - Life Disclosure Working Group – NAIC

  • For most plans, however, the GMP should be equal to the GLP from TEFRA.
    • [GMP - Guaranteed Maturity Premium - NAIC, Universal Life Model Regulation]
    • [GLP - Guideline Level Premium - Congress, IRS, Contract]
  • The Model Regulation assumes that future premiums will be paid at the whole life level, and calls this premium the GMP [guaranteed maturity premium]

--  Shane Chalke

1984 - SOA - NAIC Update, Society of Actuaries - 24p

  • Equity Risk Premium - ICS - Capital Standards
    • 2019 - AIA /IAIS - Three Bucket Approach - 9p
      • Currently the Insurance Capital Standard (ICS) makes no allowance for the spread over the risk free rate that is produced by equities
      • This is despite the fact that it is widely accepted that equities earn more than risk-free assets over the long term
      • This spread is commonly referred to as the equity risk premium and has been widely discussed in academia by financial economists and other experts
  • 1991-4, NAIC Proceedings -  premium def naic over 60

    • Definitions: The following terms used in the above chart are defined as:

      • 1. Premiums - Amount you must pay each year to keep this policy in force.

  • [Limits on premiums, TEFRA??, GMP]
  • Ted Becker of the Texas State Board of Insurance also said the group had questions on whether or not some limitations should be put in the contract as to the total amount of future premiums to be accepted.

2. Report of Universal Life Advisory Committee

1983-2, NAIC Proceedings

  • A regulator had told them that in that case they should not treat their universal life as though it was a whole life policy matured by paying the GMP [Guaranteed Maturity Premium].
  • Rather, you should assume that people will pay the guideline level premium, and that will give you a policy that provides guaranteed coverage for something less than the whole of life.

--  Daniel J. McCarthy

1999 - SOA - Valuation Actuary Symposium, Society of Actuaries - 28p

  • Guaranteed Gross Premium - [Bonk: Same as Guaranteed Maturity Premium?]
  • For purposes of determining the guaranteed gross premiums used in the demonstration in Section 6.B.2:
    • a. For universal life policies, the guaranteed gross premium shall be the premium specified in the contract, inclusive of any applicable policy fee, or if no premium is specified, then the level annual gross premium at issue that would keep the policy in force for the entire period coverage is to be provided based on the policy guarantees of mortality, interest and expenses; and
    • b. For policies other than universal life policies, the guaranteed gross premium shall be the guaranteed premium specified in the contract, inclusive of any applicable policy fee. (p20-25)

202x - NAIC Valuation Manual

  • Commissioner Willis (DC) said the trouble with disclosing that the premium might at some point "resume" is that the premium never stopped.
    • It is misleading to make a consumer think the premium is not being paid.
    • [Bonk: Vanishing Premium, Policy Mechanics, Cash Flow, Work)

1994-3, NAIC Proceedings

  • Related:
  • Universal Life Insurance Model Regulation (#585):
  • Guaranteed Maturity Premium (GMP)
  • Guaranteed Maturity Fund (GMP)
  • 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."
    • "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.
    • "As a result, it is expected that most universal life insurance policies will be sold as permanent plans."
  • ...the "premium outlay" terminology was changed to "net payment."

1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p

  • The thrust of this development says the deal needs to be articulated.
    • This deal has several components, and one is with respect to premiums.
    • If they are not guaranteed or fixed, there needs to be an understanding of how they can vary.

--  Walter S. Rugland

1996 - SOA - Nonforfeiture Law Developments, Society of Actuaries - 23p

  • Media - USNews
  • Universal life insurance, like whole life insurance, is a type of permanent life insurance policy that accumulates tax-deferred cash value.
  • The policy stays in effect for as long as you remain alive and pay the premiums.

usnews.com/360-reviews/life-insurance/universal-life-insurance

Premiums - Actuarial vs Not Actuarial?
https://actuarialtoolkit.soa.org/tool/glossary ---  "actuarial terms and definitions"

 

Actuarial - Gross Premium, Net Premium

Not Actuarial? - Planned Premium, Target Premium, Scheduled Premium, Guideline Level Premium, Guideline Premium, Guaranteed Maturity Premium, 

  • And the fourth is the phantom premium;
    • ...that is, the difference between the maximum premium and the current premium for an indeterminate premium life policy
    • and the difference between the maximum cost of insurance versus the current cost of insurance for a Universal Life policy.
  • The question is whether or not this difference is a dividend.

-- William R. Britton, Jr.

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