As part of the Full Disclosure policy analysis series, Blease Research surveys leading variable and variable universal life upper market insurers twice per year.
The charts in this report are an excerpt of our latest findings on products for sale in April, as well as those released on May 1, when many variable products’ prospectuses are released.
Full Disclosures findings reveal that even amid a slowdown in sales at many companies due to fallout from declining equity subaccount returns, insurers are busily adding new policies to differentiate themselves from others in the market.
These excerpts of illustrated values are designed to show how companies are illustrating their products in the marketplace, and provide an overview of the specific strengths each brings to market.
Variable life illustrated values (the majority in this report are built on a universal life chassis) are based on a Male Age 40 paying a $3,000 annual premium and a $250,000 policy. If our specified premium of $3,000 is too low to illustrate the policy for this age and face amount, the policies are blended with term insurance, if available. The class specified is best nonsmoker as long as the class represents at least 15% of the contract issued of each policy.
Companies were asked to employ a 10% gross crediting rate that is then net of average fund expenses. Not all companies use the same averaging method. Some use a regular arithmetic average and others weight the average according to assets allocated to the various investment options available under each policy.
The death benefit type is level; however, a column is included with a true increasing death benefit for each policy.
Internal rates of return (IRRs) indicate which products are designed to be more efficient in producing cash values or death benefits, or are an all-around solution. The IRR can be applied to cash values as well as death benefits, and we have chosen to measure both at a policy duration of 30 years.