Premium Payment Options

  • 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, Society of Actuaries - 16p

  • Many insurance contracts offer the policyowner options regarding premium payment, benefit patterns, and policy loans.
  • This flexibility means that many different patterns of future cash flow could arise under the contract. (p6)

2002 09 - AAA - Fair Valuation of Insurance Liabilities: Principles and Method, American Academy of Actuaries - 48p

  • Carriers marketed interest rate-sensitive insurance under a host of premium payment options, including the `vanishing premium' plan.

2009 -  LC - Kaldenbach v. Mutual of Omaha - Court of Appeals of California, Fourth District, Division Three. 78 Cal.App.4th 830 (2009) 100 Cal.Rptr.3d 637 - Google Scholar-Kaldenbach-2009

  • Persons seeking life insurance for the Whole of Life have several choices: they may...
    1. buy a one-year renewable term contract and renew it annually, paying the full cost of insurance for each year
    2. buy coverage for the insured's life with a single premium payment, or 
    3. buy coverage for the whole of life under some type of installment arrangement.  (p47)

1984 - Book - Life Insurance: Theory and Practice, Robert I. Mehr