Off-Track / On-Track
- In essence, the model regulation <Universal Life Model Regulation> assumes that at issue, all universal life policies are permanent plans.
- The r-ratio is meant to measure the extent to which the policy is "on track" as a permanent plan.
Statutory Valuation of Individual Life and Annuity Contracts | 5th Edition Claire, Lombardi and Summers
Mr. Wicka said the paper <Assurity White Paper> advocates for:
1) additional information to be provided to consumers regarding how the timing of their payments impacts the product; and
2) follow-up information to be provided to consumers at the time their payments go off-track so that consumers are aware of the impact to their policies.
201x, NAIC Proceedings
This was an optional idea that we called "Illustrations As Road Maps.
- The concept is that instead of letting the actual performance of a Universal Life policy diverge over time further and further from what was originally illustrated, you could send policyholders a notice each year on the anniversary, if the results are below what was illustrated.
- A letter would state the need to pay an additional amount to get back to what was illustrated, because interest rates are lower.
- This would have two advantages.
- First, it would keep people on track with their illustrations.
- Second, it would help people understand the workings of their universal life policy.
-- John Keller
1991 - Illustrations - Society of Actuaries
- ... in 2000 that the universal-life policy she bought in 1983 was financially off track.
2018 0919 - Universal Life Insurance, a 1980s Sensation, Has Backfired - Wall Street Journal, Leslie Scism