Policy lapses and surrenders are an interesting behavior as it can either be:
- a conscious decision to surrender a policy,
- a forced decision driven by cash needs,
- or a failure (conscious or not) to pay the required premiums to keep a policy inforce. (p48)
2014 - Modeling of Policyholder Behavior for Life Insurance and Annuity Products, Society of Actuaries
- 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