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 second universal life release of 2010 features 114 policies including 82 fixed policies (up from 75 a year ago) and 32 indexed policies (up from 26 a year ago). This excerpt is for traditional products only, with one following next month for indexed varieties. In the 13 years Full Disclosure has been publishing universal life policy information, this is a record number of policies!
Of the 82 fixed policies presented here, 10 are brand-new to the market since we last updated this report six months ago. Trends we are noticing are an expansion in the number of policies that can be customized to perform one or multiple objectives, as well as an increasing number of guaranteed minimum death benefit polices (GMDB) that are also designed to generate moderate cash value accumulation. These GMDB/accumulation policies often have ‘Plus’ in the policy name but not always. Other policies in this report are designed for guaranteed death benefits with little cash value, maximum cash value accumulation, or maximum death benefits.
A few years ago, we added a code appearing next to each policy name in the excerpted charts as to what that each policy’s design objective may be. The picture is somewhat murkier as delineations between product types are blurred so we may have to add other categories to our list. For now, though, they are:
GMDB: Guaranteed Minimum Premium/Death Benefit
Policies that generate little cash value and are designed for long-term (lifetime) death benefits with a guaranteed minimum premium outlay
DB: Maximum Death Benefits
Policies that generally cost little to carry on a current basis whose primary purpose is to provide maximum death benefits for a given premium
AV: Maximum Accumulation Values
Policies designed for maximum cash value accumulation with premium going more towards building values than growing death benefits
F/G: Flexible/General Purpose
Policies constructed to achieve different aims by selecting different options, e.g., made to be a Guaranteed Minimum Premium/Death Benefit policy, or an Accumulation Policy depending on options chosen or funding level. Sometimes called a “balanced” or “all around” policy, generating cash values and death benefits in somewhat equal measure