Guaranteed Maturity Premium (GMP)

“The <Universal Life> Model Regulation assumes that future premiums will be paid at the whole life level, and calls this premium the GMP (the guaranteed maturity premium).”  Shane Chalke
1984 – NAIC UPDATE, Society of Actuaries

Universal Life Insurance Model Regulation (#585): 

– Guaranteed Maturity Premium (GMP)
– Guaranteed Maturity Fund (GMF)
– 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.” 1999 SOA Valuation Actuary Symposium va-99of

1999, Valuation Actuary Symposium – Session 44, Edward L. Robbins, Society of Actuaries

“The Guaranteed Maturity Premium is that gross annual premium which will mature the policy based on the guaranteed factors set forth in the policy.”
1993-2, NAIC Proc 13. The Cover Page for any illustration should contain the annual premium necessary to maintain the policy to maturity based solely upon the guarantees in the policy. This will assist the policyowner in understanding the differences between guaranteed and non-guaranteed policy features. 
1994-1, NAIC Proc. ,

Statement of the National Association of Life Underwriters (NALU)

to the NAIC Life Disclosure Working Group

of the Life Insurance (A) Committee

on Life Insurance Illustrations

 

Life and Health Actuarial Task Force
Conference Call
August 22, 2000
2. What is the projection interest rate to be used to calculate the guaranteed maturity premium and the guaranteed maturity fund for variable universal life policies?

 

MR. ROBBINS: The actual wording is, “the guaranteed maturity shall be that level gross premium
paid at issue, and periodically, thereafter, over the period during which premiums are allowed to be
paid, which will mature the policy on the latest maturity date, if any, permitted under the policy.”
So it has two things that are sort of in conflict: “Allowed to be paid” and “which will mature the policy MR. RAYMOND: It’s hard to tell whether “permitted under the policy” only refers to the latest
maturity date or if it refers to the premiums also. MR. MCCARTHY: As Ed pointed out, this happened before 7702.
MR. RAYMOND: Nobody thought of these things back then. FROM THE FLOOR: I just wanted to mention that some of us, a few years ago, quit including any
difference between current and guaranteed expense charges into our guideline premium calculations, I
believe on your advice.

MR. MCCARTHY: I didn’t know she was going to do that.

FROM THE FLOOR: For recent issues that means that guideline premiums are always going to be
less than guaranteed maturity premiums.

1999, Valuation Actuary Symposium – Session 44, Society of Actuaries