Benefits

C. Universal Life

The agent and prospect have the ability to choose almost any pattern of benefits and premiums. No longer is the sale <Universal Life> limited to one of several fixed plans of insurance from a ratebook.

1991-1992 – FINAL REPORT* OF THE TASK FORCE FOR RESEARCH ON LIFE INSURANCE SALES ILLUSTRATIONS – 142p, Society of Actuaries

“….provide illustrations based on different assumptions. This would serve to demonstrate to the consumer the effect on future benefits of changes in assumptions.”

STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE TO THE NAIC MARKET CONDUCT SURVEILLANCE (EX3) TASK FORCE, June 13, 1988

1988-2, NAIC Proceedings

? How much do the benefits build up in the policy?

? How will the timing of money paid and received affect interest?

2018 – LIBGWG – Cude Letter / Markup Life Insurance Buyer’s Guide – Revised 2-9-18 for discussion on conference call 2-22-18

NAIC Recent Working Groups
-Cude LIBGWG? Markup – What does Benefit mean?
-Life Insurance Buyer’s Guide…. Do your Premiums or Benefits change? Keywords:
Benefit Reserves, Benefit Generating Account (BGA), Benefit Generating Function (BGF), The purpose of the “r” factor, however, is really quite simple. If the
actual account value is less than the GMF <Guaranteed Maturity Fund>, then future guaranteed policy benefits will run out before the maturity date.

This is true because the GMF is that amount which is exactly on target to mature the policy.

Therefore, anything less than the GMF will be insufficient to mature the policy on a guaranteed basis. It was felt that,in order to reserve
adequately for all policy guarantees, it would be desirable to make sure that any projection of benefits extends until the maturity date of the policy. Shane Chalke

1984, NAIC UPDATE, Society of Actuaries

“Mary Griffin (Consumers Union) asked about Section 2 and the phase “misrepresenting the benefits of the life insurance policy.”
1994-2 NAIC Proc. Maybe he is not getting all the disclosure he needs, as far as the continuing benefit is concerned, when the interest rates change from that illustrated. Gary P. Monnin
1982 – Universal Life – Society of Actuaries The typical “present value of future benefits less the present value of future net premiums” formula is challenging to apply to flexible premium universal life policies, since neither “future premiums” nor “future benefits” are known for any particular policy.”
2018, Statutory Valuation of Individual Life and Annuity Contracts, page 323 | 5^th Edition, Claire, Lombardi and Summers

“Current assumptions are critical to interest sensitive products such as Universal Life. When interest rates are high, benefit projections (such as cash value) are also high. When interest rates are low, these projections are not as attractive.”

https://www.dfs.ny.gov/consumers/life_insurance/types_of_policies