As part of the Full Disclosure policy analysis software series, Blease Research surveys leading variable and variable universal life insurers active in upper market sales twice per year.
The charts in this report are excerpted from Full Disclosures latest findings on products for sale on Sept. 1, 2001. 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.
This report features results for 54 contracts from leading variable life companies serving upper markets. Companies new to the Full Disclosure series include Lincoln Benefit Life and Paragon Life.
While sales were trending downward significantly in the first half of the year, there seems to be a turnaround in perception by the industry and those we market to that the worst is over and now is the time to buy low. And even if overall returns decline further, fund managers have a pretty good handle on which companies will benefit most from unsettled economic and world events.
From our vantage point as product analysts, we see eagerness at our participating companies to get new generations of variable products on the street and to continue to refine product pricing and designs to keep abreast of ever-evolving competition. Check out the Product Strengths section of this report for the latest product incarnations and where companies are placing design emphasis.
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 $7,500 annual premium and a $1,000,000 policy (see chart on page 30). If our specified premium of $7,500 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.