Universal Life - Why?

  • UL insurance was an industry response to those who planned to “buy term and invest the difference” when interest rates spiked in the late 1970s.

2014 - SOA - Sustained Low Interest Rate Environment: Can It Continue? Why It Matters, Society of Actuaries - 51p

  • (p17) - Prior to the 1980s, insurers sold primarily fixed-premium term and whole-life insurance to individual policyholders.
  • With competitive pressures significantly reducing sales of whole-life products, insurers had little choice but to innovate in the 1980s to meet demand.
  • They did so by redesigning whole-life into a hybrid product that included a traditional income protection component and a long-term investment component using market-based yields (and thus were interest rate–sensitive).
    • The first of these new complex products, universal life insurance, revolutionized the industry.
    • Its popularity was rooted in its flexibility.

2013 - NAIC / CIPR - State of the Life Insurance Industry: Implications of Industry Trends - 220p

  • 2017 1120-?? - NAIC - LIBG, Life Insurance Buyer's Guide Working Group - Brenda Cude to NAIC - re: 08-18-2017 Draft Life Insurance Buyer’s Guide - 5p - - 6p - [cmte_a_libg_wg_171120_karrol_kitt_brenda_cude_buyers_guide_comments]
    • Comment [BJC2]:
      • Permanent insurance is a term used only by the industry – not by consumer educators.
      • We would prefer – Life insurance comes in two basic types: Term and whole life (also referred to as permanent insurance).
  • 2019 0917, NAIC  - LIIIWG - Life Insurance Illustrations Working Group - [Bonk: Not in Proceedings]
    • Teresa Winer (GA) - I feel like a lot of these policies had good intentions and came out of Buy Term and Invest the Difference to compete with that so people wanted more disclosure of all the components.