Dynamic

...completely Dynamic services and policy opportunities for their customers to purchase and to elect a variety of options.

-- Michael Lovendusky, ACLI

2019 1109- Life Insurance Illustrations Working Group Conference Call <Bonk: Not in Proceedings>

"Dynamic Products" are products with premiums and benefits that can fluctuate from month to month, depending on the premiums the policyholder pays, the withdrawals the policyholder makes, the investment returns credited to the policy, and the mortality and expense charges deducted from the policy."

"Some common names for dynamic products include universal life, variable universal life, unit-linked life, and adjustable life." 

2000, - Life Insurance Products and Finance, page 288D.B. Atkinson and J.W. Dallas

  • They <Universal Life Policy> merely afford purchasers greater flexibility in designing their contracts so as to meet their individual needs.

1982-1 STATEMENT OF THE AMERICAN COUNCIL OF LIFE INSURANCE BEFORE THE NASAA NAIC JOINT REGULATORY INSURANCE - 10p 

  • As a result of the declining interest rates during the first ten years, the amount accumulated in the deposit fund after ten years is less than anticipated when the contract was issued, and less than necessary to keep the contract in force for the long term if the original "target premium" assumptions were continued.
  • Industry experience indicates that policyholders will increase their renewal premium payments in order to maintain their valuable insurance and minimum deposit interest rights."

2004 - "Renewal Premiums and Discretionary Participation Features of a Life Insurance Contract", A Joint Research Project,  ACLI/IAA

NAIC Working Groups - Current / Recent

ACLI Letter

Assurity White Paper

2017/11/15, LIBGWG, American Academy of Actuaries, Letter
Universal life also allows for flexibility in policy benefits, not just premium payments.

  • With a dynamic product, continuation of a policy is tied to having enough funds available in the account value to cover the monthly deductions for expenses and mortality. This contrasts with pre-scheduled policies, where continuation is tied to the payment of a pre-scheduled premium.

2000, - Life Insurance Products and Finance, page 19D.B. Atkinson and J.W. Dallas

This leads to the second attitude adjustment that is needed.

  • The old distinction between term and permanent is usually not appropriate for an adjustable life policy.
  • In every sense an adjustable life policy should be a permanent policy regardless of what the current static plan may be.

Its flexibility means that it can be the only policy a person ever
owns even if the initial version corresponds to a ten-year term plan.

An adjustable life policy can be adjusted upward or downward in amount and/or premium to accommodate the needs and premium capa­bilities of the insured.

  • It seems better to look at it in terms of what it can adjust to in the future rather than to concentrate on whatever plan today's premium/face amount relationship requires for defining values and dividends.

The emphasis should be on the basic permanent result
that flows from the adjustability.

1976Toward Adjustable Life Products, Walter L. Chapin, Society of Actuaries

  • Universal Life

    Unlike Adjustable Life, where a current plan is defined, but is subject to change, a Universal Life policy at any time has only a "minimum" and a "maximum" plan, based on the current cash value, and minimum and maximum allowable premiums.

1989-1, NAIC Proceedings

 

                     1981, Universal Life, Society of Actuaries
4/4/2018
LIBG WG
ACLI Letter: Comments on the “3-19-18 Draft Buyer’s Guide” exposure draft for the Life Insurance
Buyers Guide
Binder 4 p209
Keep in mind that you may be able to make <ACLI Added>  changes  to <ACLI Added> your current policy to get the benefits or amount of coverage <ACLI Added> you want.

 

  • The contract <Universal Life> is a lot like the Adjustable Life concepts of The Bankers and Minnesota Mutual, with the significant, additional flexibility that a plan change is not required each time there is a change in premium payments.

--  SPENCER KOPPEL

1979 -  FUTURE TRENDS AND CURRENT DEVELOPMENTS IN INDIVIDUAL LIFE PRODUCTS,  Society of Actuaries

If that is the case, how does an agent program somebody? How does he tell a person what he needs to pay to keep his premiums level or to have paid-up insurance at age 65?  ALLAN W. SIBIGTROTH

1979 - FUTURE TRENDS AND CURRENT DEVELOPMENTS IN  INDIVIDUAL LIFE PRODUCTS, 24p, Society of Actuaries

While the life insurance industry has been in existence in the U.S. for more than a century and a half, it has been only recently that life contracts have featured flexible premiums, benefits, and other variable features.

2004 - Renewal Premiums and Discretionary Participation Features of a Life Insurance ,Contract: A Joint Research Project 52p

 

  • A regulator had told them that in that case they should not treat their universal life as though it was a whole life policy matured by paying the GMP <Guaranteed Maturity Premium>.
  • Rather, you should assume that people will pay the guideline level premium, and that will give you a policy that provides guaranteed coverage for something less than the whole of life. 

--  Daniel J. McCarthy

1999 - Valuation Actuary Symposium, Society of Actuaries

  • I think you really have to make sure that people understand volatility, whether you solve for a policy blowing up or values being halved.

  • I think you have to catch people's attention, and that is all to the good.

--  Mr. Coleman (Prudential) Technical Resource Group (NAIC), PROBLEMS AND SOLUTIONS FOR PRODUCT ILLUSTRATIONS, Society of Actuaries

 

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

--  LAWRENCE SILKES

1990, Life Product Development Update, Society of Actuaries

1999 SOA VAS only term to
  • Dynamic
    • X - 1980s acli - design your own
    • X - Actuarial -
      • "Dynamic Products" are products with premiums and benefits that can fluctuate from month to month, depending on the premiums the policyholder pays, the withdrawals the policyholder makes, the investment returns credited to the policy, and the mortality and expense charges deducted from the policy."

        "Some common names for dynamic products include universal life, variable universal life, unit-linked life, and adjustable life." 
        2000Life Insurance Products and Finance, page 288D.B. Atkinson and J.W. Dallas

    • X - UW - Madison - UL as 2x year term policy
    • Legal Case
    • Chalke - bga / bgf
    • AL - 1, 2 , 3
    • X - ULMR - r-ratio / r-factor, Guertin - one ratio
    • LIBG - Do the premiums or benefits change?
      • Cude - Markup - What are Benefits?
        • Is she asking because she doesn't know? or does she want to make it clearer in the LIBG?
    • 198x - NAIC Update?
    • X - 198x - Universal Life
      • The Premium can be anything, the Benefit can be anything
    • 20XX - NAIC Working Groups

R-Ratio
Annual Report to Consumer
FTC - Table $200

Adjustable Life

marked by usually continuous and productive activity or change
https://www.merriam-webster.com/dictionary/dynamic


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