....the Flexible Premium nonpar policy has already been challenged by regulatory authorities on the grounds that the difference between the guaranteed premium and the current experience premium is a policy dividend.
Let us agree on our terms.
What I mean by traditional life policies is the life insurance product stereotypes.
A stereotype policy is one which is indivisible and wholly defined, by its terms, at issue.
Under this heading I would include the American version of "Universal Life" - what I call Univoisal Life.
Univoisal Life has a rigid design structure for ease of compliance with regulatory and tax standards.
On the other hand, "true Universal", based on my original formulation, is modular and completely flexible.
The replacement threat presented by Univoisal Life and, contrarily the value of Univoisal Life in defensive terms, can be measured by comparing the premiums for $100,000 of traditional whole life insurance, age 40, with premiums for the analogous Univoisal Life.
Traditional (average) - $16.50 M
Traditional (best) -15.50 M
Univoisal - 9.50 M
The Law of Requisite Variety appeals to conventional actuaries who devise complicated problems for which they develop equally complicated solutions.
The thesis is diametrically opposed to the concept of "universality", which aims at simplicity of both problem and solution.