Premium - Actuarial - Universal Life

  • The complications begin with a very simple question:
    • What's the premium for Universal Life?
      • It could be almost anything.
    • Then what's the cash value?
      • That depends on the premium.
    • It is the relationship between the premium and cash value that determines the product characteristics of Universal Life.

--  Ben H. Mitchell, [Bonk: a consulting actuary with Tillinghast in Atlanta - Years-?]

1981 - SOA - Universal Life (RSA81V7N412), Moderator: Samuel H. Turner, Society of Actuaries - 16p 

  • What UL does, among other things, is to let the policyowner or maybe the agent pick the point on the line between these two promises-- pick the point that best fits the situation that the agent or the policyowner is in.
    • He can have a high premium policy with lots of dividends if experience does remain good
    • or he can pay a very low premium but have a big risk of increasing the premium if experience does not turn out so well.
    • One thing this ability does, it opens up the traditional 3-factor dividend formula, the black box, so that some of the workings are exposed.
      • That is the good side, the opening up of the black box.

-- Bruce E. Booker

1988 - SOA - Update on Universal Life Reserves and Non-Forfeiture Values, Society of Actuaries - 36p