While new product introductions and repricing have been accelerating over the last 18 months due to adoption of the new 2001 mortality tables, much of the action has taken place more recently. The editors of Full Disclosure periodically survey life insurers active in upper markets across a wide range of product specifications, illustrations, guaranteed minimum premiums and more.
The first universal life release of 2008 features 120 policies including 33 indexed UL contracts. This excerpt is for traditional products only, with one following within the next couple of weeks for indexed varieties.
Of the 87 traditional UL policies included here, nearly 20% are brand new policies. This is an impressive change from last summer, especially in light of a nearly identical list of participating companies. Products using the new tables and ongoing product specialization are the two trends driving the number of policies represented and new product introductions. Of the 87 policies in this section, 45 utilize the new tables. These new policies have a maturity age of 121 or “lifetime” and are more competitive on a policy cost basis, as the Cost of Insurance (COI) in a given year is lower in many cases.
Companies are eager to incorporate the new pricing and roll out new generations of products that are not only more competitive, but are more specialized than in the past. The design pendulum continues to move away from single products that can be modified by options (such as adding a long-term guarantee) or riders, to ones that are designed for a specific outcome.
Specialized policy types include minimum premium/maximum death benefit policies, accumulation policies for maximum cash values and income for the insured in the future, business policies that may include high early cash values and return of premium death benefit options, and policies that aren’t designed to produce much cash value at all. In fact, of the 87 traditional UL policies in this edition, 18 are not designed for building current assumption values. Their goal is minimum guaranteed long-term premiums. The release features a separate section for those products and the premiums of each across a wide range of ages and issue classes.
There are 3 excerpts in this report taken from the latest Full Disclosure UL/indexed UL edition. The largest chart includes illustrated values on a current basis and is accompanied by one featuring select minimum premiums necessary to guarantee the premium and death benefit to age 100 or for life (or age 121). A final table features retirement income from policies generally designed for maximum accumulation values and resulting income streams. The parameters of the illustrations are included with the charts.