Investment Risk

Investment Risk

-“Mr. Hughes <ACLI> briefly discussed “universal life” type products.”
” In the ACLI’s view, there is no investment risk to the consumer since the product typically carries a guarantee which includes principal plus four percent…”
1982-1 NAIC Proceedings

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One corporate reason is that several big life insurance companies got a nasty shock in the late 1970s and early 1980s when they found their bond portfolio down by about 30-40 percent and a negative cash flow. They’re unhappy with their investment risk and happy to pass it on to the policyholder.  — Michael R. Tuohy
1985 – VARIABLE UNIVERSAL LIFE INSURANCE, Society of Actuaries – 22p

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“In addition to transferring investment risk to policyholders,

universal life insurance also requires the policyholder to assume the risk of shifts in mortality rates.”
1986,AP, A comparison of universal / variable life insurance with similar unbundled investment strategies, Stephen P. D’Arcy College of Commerce and Business Administration, University of Illinois at Urbana-Champaign