Universal Life - Who wanted this?

  • These products <Universal Life, etc> arose from a significant rise in interest rates in the early 1980’s and a wave of consumer demand for products better meeting their needs. (p37)

2020 08210 - IMF - UNITED STATES FINANCIAL SECTOR ASSESSMENT PROGRAM TECHNICAL NOTE—INSURANCE SUPERVISION AND REGULATION - IMF Country Report No. 20/244 - [LINK-94p]

  • Walter Miller:  Arnold <Dicke> suggested that universal life stemmed from the desire of many consumers to have a product that unbundles the insurance and investment elements.
  • At New York Life, we get a lot of communications from policyowners but we cannot remember one single request for a product that unbundles the insurance and investment elements.
  • I would like to ask how many people here have received requests for such unbundling from the public.  (No hands were raised.)

1981 EQUITY FOR EXISTING POLICYOWNERS, Society of Actuaries

  • Actually the demands for many of these new products come from the marketplace. (p338)

-- Thomas Gregg, National Association of Life Underwriters. (NALU)> 

1983 - GOV - Tax Treatment of Life Insurance - [PDF-

  • UL insurance was an industry response to those who planned to “buy term and invest the difference” when interest rates spiked in the late 1970s. (p35)

2014 - Sustained Low Interest Rate Environment: Can It Continue? Why It Matters, Society of Actuaries - 51p

New Products and Special Markets

A. Modern computers make it feasible to consider marketing a flexible policy under which the premiums and benefits could be changed to meet the changing needs of the policyholder.

ARDIAN C. GILL

  • Computers may make it feasible to produce a highly flexible policy with benefits and premiums that vary with the policyholder's whim.
  • Whether it is desirable to do so is another question.
  • The truth probably is that the general public neither needs nor wants a great deal of flexibility.
  • Any attempts on our part to anticipate his changing needs and to build into our policies the necessary flexibility may well be futile for the run-of-the-mill policyholder.

1967 - INDIVIDUAL LIFE AND HEALTH INSURANCE, Society of Actuaries - 62p