Select and Ultimate

  • The select and ultimate term product is an example of a poorly designed product.
    • The low going-in rate with increasing premium in later years, obviously encourages replacement.
  • (Recall that select and ultimate term are mortality and tax driven, not persistency driven.)

--  Lawrence Silkes, Vice President and Chief Actuary of New Jersey Life.

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

  • 1980 - SOA - New Mathematical Laws of Select and Ultimate Mortality, Society of Actuaries - 66p
  • 1980 - SOA - Pricing a Select and Ultimate Annual Renewable Term Product, Society of Actuaries - 38p
  • Another possibility that may have merit is to charge select and ultimate premiums for the pure insurance component of a universal life plan.
  • However, we agree with Mr. Smith and dozens of other actuaries with whom we have discussed S/U ART that those companies selling products (be they term or "whole life") with select premiums may be asking for trouble.
  • Time will tell whether trouble will respond, but we expect it will.

--  (Authors' Review of Discussion- Jeffery Dukes and Andrew M. Mac Donald

1980 - SOA - Pricing a Select and Ultimate Annual Renewable Term Product, Society of Actuaries - 38p

  • One very ominous trend is a movement toward select and ultimate mortality charges on Universal Life, and this is one that hopefully will stop.
    • We hope that the companies will not follow the same suicidal tendencies with Universal Life that they've followed with annual renewable term down the select and ultimate path.
    • Universal Life has been promoted by a number of people as an alternative to the self-destructive practices that the industry has followed on annual renewable term, so hopefully we will not make the same mistake again.

--   Randall P. Mire

1983 - SOA - Universal Life (rsa83v9n32), Society of Actuaries - 22p