The latest Full Disclosure life policy excerpts feature 72 survivorship universal, whole and variable life insurance policies. This is down from our previous survey conducted at the end of 2006 that featured 81 excerpts. The reason for the decline is that a number of companies are re-pricing policies as a result of implementing the new 2001 CSO mortality tables. Companies are required to adopt the new tables by 2009, so this process should accelerate further over the next year. Some are taking this opportunity to introduce completely new policies, perhaps prompting a policy design competitive “arms race” past 2009.
As far as recent survivorship sales trends are concerned, LIMRA reports sales were 1% higher in the first quarter of 2007 compared to that period in 2006. This result was due to a 19% increase in sales of variable survivorship products. LIMRA also noted that sales were about evenly split between accumulation-oriented products and those designed more for protection.
The Full Disclosure excerpts in this report feature illustrated values for whole, universal, indexed universal and variable life survivorship products. And while these charts are only slices of the Full Disclosure database, they will give you an idea of how these products perform on a prospective basis. Also included are charts for minimum long-term guarantee products. This increasingly popular use for flexible premium survivorship life provides minimum annual premiums to age 100 or beyond (lifetime) with little or no cash value at maturity, but with low guaranteed annual premiums.
In addition to the guaranteed premium charts, three others cover current illustrated values for variable, universal and whole survivorship life. These illustrated values are based on current interest or dividend crediting, expenses and, in the case of variable designs, a predetermined crediting rate. Full Disclosure applies the internal rate of return method to current illustrated accumulation values and current death benefits measured at policy durations of 30 years dependent on age combination. The IRR of cash values rises over time, as the IRR for the death benefits falls.