Universal Life with Secondary Guarantees (ULSG)

  • The Universal Life contract with secondary guarantees has been one of the most controversial life insurance products introduced in the United States.

2014 04 - SOA - Model Validation for Insurance Enterprise Risk and Capital Models, Sponsored by CAS, CIA, SOA Joint Risk Management Section, prepared By Markus Stricker, Shaun Wang, Stephen J. Strommen Society of Actuaries - 47p

  • Regulation XXX
  • In addition, XXX affects reserving for universal life plans with secondary guarantees.
  • The specific concern addressed here deals with a term plan that is hidden in a universal life plan.
  • These plans will have an additional guarantee that, if a certain premium is paid for 15 or 20 years, then the policy will not lapse, despite the fact that there may not be a positive account value on the policy.
  • Essentially, this allows the policy to operate like a 15- or 20-year level term.

--  Craig R. Raymond

1995 - SOA - Valuation Actuary Symposium Proceedings (VASP) - Session 2 - Life and Annuity Valuation Issues, Society of Actuaries - 18p