425-letter-2

Also, because most people presume that if you pay your premium continuously, your policy will remain in effect, quite a few people had a hard time understanding how or why the policy would terminate in policy year 31.

This was simply foreign to their way of thinking.

1990-1A - NAIC Proceedings - NAIC / LIMRA Focus Group - Universal Life Disclosure Form Test Market Results - 10p

Recommendation 5:

  • If appropriate, the paragraph might add something like:
  • "The amount of premium you have elected to pay, $300 per year, is however insufficient to keep the policy in force to age 95 at the guaranteed minimum interest rate of 4%; the policy would terminate at age 66.
    • <Plan of Insurance>
      • x-Year Term on a Guaranteed Basis
      • x-Year Term on a Current Basis>
  • To be sure that the policy continues to age 95, even at the minimum interest rate of 4%, you would have to pay  $644.30 per year <Guaranteed Maturity Premium> for the entire life of the policy." <Plan of Insurance - ???? - See Legal Case Faye v Aetna>
  • (page 466) 

1990-1A - NAIC Proceedings - NAIC / LIMRA Focus Group - Universal Life Disclosure Form Test Market Results - 10p