Nevertheless, an insurable person today can generally buy permanent insurance at apparently lower cost than
ever before.

• How has this been achieved?

It has been accomplished by mercilessly squeezing profit margins, by assuming recent lapse experience to be a passing phase, by swallowing mortality declines as quickly as they appear, by weakening valuation and non-forfeiture standards, and by invading traditional field compensation. We have introduced non-guaranteed premiums, we have designed interest-sensitive, universal and variable products, and soon a combination of all these innovations may sweep the market.

• Yet the downward pressure on premiums continues.

If our product objective must be to offer minimum-cost guaranteedpremium, permanent insurance, then funding even low cash values and hence providing for the resulting C-3 risk may not be the best approach.

1984 09 - The Actuary - THE CASE FOR POLICIES WITHOUT GUARANTEED CASH VALUES, Lorne Campbell - 3p