"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


2016-Society of Actuaries -Persistency-Target-Premium-mp-2016-iss3-zhao-komissarov.

<Bonk:  Plans of Insurance vs Contracts of Insurance>

Mr. Birnbaum said the Working Group’s charge specifically includes how the summaries are “designed, formatted and accessed” by consumers, and the stated purpose of Model #580 is to “require insurers to deliver to purchasers of life insurance information that will improve the buyer’s ability to select the most appropriate plan of life insurance for the buyer’s needs.” 

<Bonk: Policy Overview as Shopping / Comparison Tool among individual contracts>


Plans of Insurance / Types of Policies - Examples

  • 5-year Renewable Term
  • 20-year Term
  • Whole Life
  • Variable Life
  • Universal Life
  • Index Universal Life


Contracts of Life Insurance

  • PruLife Essential UL®
  • Lincoln WealthAccumulate® IUL (2019)
  • Pacific Select VUL 2
  • Farmers EssentialLife® Simple Whole Life

<Bonk: Not promoting these, just wanted to show the difference between "Plan of Insurance" and "Contracts of Life Insurance">

LIIIWG - 2019/2020

Birny Birnbaum - <There will be less lawsuits because of Policy Overview>


  • One of the great fears of those who draft contracts, and who attempt to make them readable, understandable and clear is concern that any new language will generate more law suits.
  • The general feeling is "let's not tamper with phrases which have been interpreted repeatedly by the courts.
  • We know what they mean and, therefore, we know what our liabilities are."



2017/7/19 - LIBGWG, Cude/ Kitt Letter
Thank you for the clarification you provided in our recent conference call about the target market for the draft life insurance buyer’s guide.

With that in mind, we started by making a list of basic information about life insurance that first-time buyers probably don’t know.