<Limits on premiums, TEFRA??, GMP>


Ted Becker of the Texas State Board of Insurance also said the group had questions on whether or not some limitations should be put in the contract as to the total amount of future premiums to be accepted.

2. Report of Universal Life Advisory Committee

1983-2, NAIC Proceedings

A regulator had told them that in that case they should not treat their universal life as though it was a whole life policy matured by paying the GMP <Guaranteed Maturity Premium>.

Rather, you should assume that people will pay the guideline level premium, and that will give you a policy that provides guaranteed coverage for something less than the whole of life.

--  Daniel J. McCarthy

1999 - Valuation Actuary Symposium, Society of Actuaries

Guaranteed Gross Premium - <Bonk: Same as Guaranteed Maturity Premium?>

For purposes of determining the guaranteed gross premiums used in the demonstration in Section 6.B.2:
a. For universal life policies, the guaranteed gross premium shall be the premium specified in the contract, inclusive of any applicable policy fee, or if no premium is specified, then the level annual gross premium at issue that would keep the policy in force for the entire period coverage is to be provided based on the policy guarantees of mortality, interest and expenses; and

b. For policies other than universal life policies, the guaranteed gross premium shall be the guaranteed premium specified in the contract, inclusive of any applicable policy fee. (p20-25)

2021 - NAIC Valuation Manual

  • Commissioner Willis said the trouble with disclosing that the premium might at some point "resume" is that the premium never stopped.
  • It is misleading to make a consumer think the premium is not being paid.

1994-3, NAIC Proceedings


Universal Life Insurance Model Regulation (#585)

- Guaranteed Maturity Premium (GMP)
- Guaranteed Maturity Fund (GMP)
- r-ratio ?
"The letter “r” is equal to one, unless the policy is a flexible premium policy and the policy value is less than the guaranteed maturity fund, in which case “r” is the ratio of the policy value to the guaranteed maturity fund." 
"Every universal life insurance policy of which the drafters are aware has a “net level premium” that could be computed which would guarantee permanent protection. "As a result, it is expected that most universal life insurance policies will be sold as permanent plans."

...the "premium outlay" terminology was changed to "net payment."


The thrust of this development says the deal needs to be articulated.

  • This deal has several components, and one is with respect to premiums.
  • If they are not guaranteed or fixed, there needs to be an understanding of how they can vary.

-- Walter S. Rugland:

1996 - Nonforfeiture Law Developments, Society of Actuaries - 23p

Media - USNews

Universal life insurance, like whole life insurance, is a type of permanent life insurance policy that accumulates tax-deferred cash value.

The policy stays in effect for as long as you remain alive and pay the premiums.

Premiums - Actuarial vs Not Actuarial? ---  "actuarial terms and definitions"


Actuarial - Gross Premium, Net Premium

Not Actuarial? - Planned Premium, Target Premium, Scheduled Premium, Guideline Level Premium, Guideline Premium, Guaranteed Maturity Premium, 

And the fourth is the phantom premium;

  • that is, the difference between the maximum premium and the current premium for an indeterminate premium life policy
  • and the difference between the maximum cost of insurance versus the current cost of insurance for a Universal Life policy.

The question is whether or not this difference is a dividend.


1983 - INDIVIDUAL LIFE INSURANCE, Society of Actuaries