Coverage Period

2. The guaranteed ending date of the policy.

  • A statement which says: Based on guaranteed interest rates, guaranteed mortality charges and the payment of the scheduled premiums, coverage will end on--------
  • RoseMarie is insisting that the Policy Schedule Page identifies the date when the policy will lapse based on paying the planned premium and guaranteed assumptions of interest and mortality rates.

Consumer Disclosure Issues Working Group of the Product Development (A) Task Force

1989-1, NAIC Proc. (p673) - <Letters/ Feedback>

g. Clarifying “Coverage Period Description”

  • The Working Group discussed what information is intended to be included.
  • Mr. Yanacheak said this is intended to capture how long a policy’s term is—a term of years or for life.
  • Mr. Birnbaum said it is intended to answer the question: If I pay my premium, this policy will cover x amount of time.
  •  Mr. Wicka suggested, and the Working Group agreed, to the following revised language to Section 5A(2)(e)(iii): (iii) Indicate whether it is a term or permanent policy.
    • If it is a term policy, indicate the length of the initial term.

2019 0917 - Life Insurance Illustration Issues (A) Working Group Conference Call 

First, he will find that the usual notions of lapse, select mortality, maintenance expenses and the like begin to lose their meaning when applied to the ALI "class."

  • Is reduction of premium a partial lapse?
  • What about reduction of face amount, or reduction of the coverage period? 

--  J. Peter Duran

1979 - SOA -The Adjustable Life Decisions, Society of Actuaries - 18p

  • Because the flexibility of UL policies gives the policyholder premium options through time, the insurance company provides the policyholder information - through policy illustrations, the policy form and annual correspondence - showing how the flexibility in premium funding enjoyed by the policyholder affects the duration of coverage.
  • The policyholder then has the responsibility to review the information provided by the insurance company and take advantage of the premium flexibility to extend or reduce how long he or she may want coverage to last.

-- Expert Report - Defendant

2008 - Legal Case - Blumenthal v New York Life

Case 5:08-cv-00456-F Document 82-1 Filed 05/26/10 Page 5 of 24

Our sales illustrations are developed to comply with state laws and regulations.

While the expiration date of the policy is not required by law, it is an important feature because it lets the customer know how long the policy will remain in-force, based on guaranteed factors and planned premiums. (p187)


  • Other policies may have special features which allow flexibility as to premiums and coverage.
    • Some let you choose the death benefit you want and the premium amount you can pay.
    •  The kind of Insurance and coverage period are determined by these choices.
  • One kind of flexible premium Policy, often called universal life, lets you vary your premium payments every year and even skip a payment if you wish.
    • The premiums you pay (less expense charges) go into policy account that earns interest and charges for the insurance are deducted from the account.
    • Here, insurance continues as long as there is enough money in the account to  pay the insurance charges.

1984 - NAIC - Life Insurance Buyer's Guide - <Scribe = ACLI>

  • In fact, a UL <Universal Life> policy will turn out to provide term life insurance, whole life insurance, or endowment insurance, depending on the premiums paid and other policy factors.

2015Life Insurance, Black Jr., Skipper, Black III, (Huebner Series)

Key Attributes of Generic Life Insurance Policies --- Table 4-2

  • Duration of coverage - Universal Life - Depends on premiums paid.  (p111)

2015 - Book - Life Insurance, 15th Ed. - Black, Skipper, Black (Huebner Series) 

Let us assume that a customer wishes to buy insurance protection for a ten-year period and wants to pay level annual premiums.

  • He can purchase a ten-year term policy or a ten-year endowment policy.
  • From a consumer's viewpoint the savings element in the ten-year endowment policy is obviously the difference in premiums between the two contracts.
  • If a customer wants thirty years of protection, and wants to pay level annual premiums, then he might choose between two policies: a thirty-year term with minimum cash values and a thirty-year endowment policy.
  • Despite the fact that there are cash values in the thirty-year term contract, from a consumer's viewpoint it has no savings element.
  • All of the premium is required to provide the thirty years of protection.
  • The savings element in the thirty-year endowment is the difference in the premiums of the two contracts.

--  Paul Overberg

1973 - SOA - Price Disclosure and Cost Comparison, Society of Actuaries - 186p 

  • He said many consumers cannot distinguish between universal life and whole life.
  • He said a narrative explanation was needed because many did not understand the numbers or the fact that a universal life policy might drain the cash value until there was no coverage left. 

--  Mr. Barkacs <Western Southern> 

1994-3. NAIC Proceedings

  • The agent said that Universal Life policy premiums would stay the same, but I came to realize that this is not true of our policies.
  • ...what bothers me is that I am afraid that this same misleading information may be the basis of my children's and grandchildren's ... planning...

-- Statement of Gloria Darleen Newberry - <Policyholder>

1993 0525 -  GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance? - [PDF-354p

The complications begin with a very simple question:

  • What's the premium for Universal Life?
    • It could be almost anything.
  • Then what's the cash value?
    • That depends on the premium.
  • It is the relationship between the premium and cash value that determines the product characteristics of Universal Life.

--  Ben H. Mitchell

1981 - SOA - Universal Life (RSA81V7N412), Moderator: Samuel H. Turner, Society of Actuaries - 16p 

  • It's very possible to have a 25-year term with zero cash value, using a UL product.

--  Lawrence Silkes

1990 - SOA - Life Product Development Update, Society of Actuaries - 20p

  • Video: Exam MLC Problem 297 "Learning Objective "Universal Life." 
  • Question: Calculate the Level Annual Premium that results in an account value of 0 at the end of the 20th year." 
  • UW- Madison / SOA - <Bonk: Goal -> Design a Universal Life policy as a 20-year term policy.>  
  • In fact, it is accurate to describe Universal Life as a generalized version of the actuarial formulas underlying traditional life insurance products.
  • In other words, it is possible to produce any traditional plan of insurance from the generalized formulas  underlying universal life. - p448.

--  Alan Richards, president and chief executive officer of E. F. Hutton Life Insurance Co.,

1983 0510, 0511 and 0728 - GOV (House) - Tax Treatment of Life Insurance - [PDF-991p-GooglePlay,

2017 1115 Letter, LIBGWG, ACLI Redlined Draft - [12p

  • Unlike a term policy, which can end after a specified number of years, permanent life insurance will continue to the policy’s maturity age so long as premiums are paid.

<ACLI wording - Line through it> -------(Note that this isn’t exactly accurate for UL, where policies can continue as long as the cash value is sufficient to pay the policy charges. We may want to make that distinction.) -------

  • <Universal Life> afford(s) purchasers greater flexibility in designing their contracts so as to meet their individual needs. 

--  Statement of the American Council of Life Insurance, Before the NASAA/NAIC Joint Regulatory Insurance Products Study Committee,  August 31,1981

1982-1, NAIC Proceedings