Commutation

  • Commutation columns and valuation factors based on 1958 CSO mortality table. <Worldcat: One Copy available at Indiana University>

USAA Life Ins. Co. v. Commissioner - United States Tax court Mar 26, 1990 94 T.C. 499

  • Conceptually similar to the NLP, the GMP differs in some notable respects.
    • The GMP is calculated using universal life fund mechanics;
    • the NLP uses commutation functions.

    • The GMP is based on policy guarantees of interest and mortality;
    • the NLP is based on valuation assumptions of interest and mortality.

<NLP> = Net Level Premium

<GMP> = Guaranteed Maturity Premium