Target Premium - Walker v LSW

  • (p41-42) - MacGowan
    • Q.  And would you please take a look at Mr. Howlett' s illustration which is in the white binder.  It's Exhibit 30 on page 10.
    • A. Yes.
    • Q. Now, in the lower right-hand corner underneath where it says page 10 of 21, do you see there's a very, very small number down there that says 51,274? Do you see that?
    • A. Yes.
    • Q. That the target premium; correct?
    • A. Correct.
    • Q. But it's not labeled target premium; right?
    • A. No.

DOC 802 - Trial Transcript - Day 8 – Walker v LSW - 210p

  • re: Target Premium - Michael Tivilini - LSW - primarily designing products, product design 
    • Q Are you familiar with the phrase "target premium"?
    • A Yes.
    • Q What's the target premium?
    • A Well, it kind of has multiple -- multiple uses.
      • It's -- primarily, it's the premium upon which the agent will earn top-level commission rate.  (p108).
    • A The other -- the other purpose of target premium is it's a premium that you'd like to get the policyholder to pay because it really would make the policy very safe.
      • I mean, it was -- something I used to say to agents about these policies was, If you can get the policyholder to pay target premium, these will never lapse. (p109)
    • All right, if this is at 4 percent, do these policies still carry the target premium?  (p129)

2013 1211 – DOC 735-2 : Deposition of Michael Tivilini- Walker v LSW – 215p

  • (p63-64) - Matthew Lawrence DeSantos, LSW’s Senior Vice-President of Distribution and Business Development (himself a former insurance agent) - DOC 792, p27
    • Q Now, are you familiar with something known as the target premium?
    • A Yes.
    • Q Does LSW have a target premium that's associated with its IUL products?
    • A We do. A target premium is really used to help calculate what the commission would be paid on a particular sale.
    • Q Is it a limit on the commission?
    • A You can look at it that way.
      • It actually allows you to get a full commission or payment up to a particular level of premium being put into a life insurance contract.
      • So in many cases the premium may be beyond what we call the target, and they would only get commission on what the target would be on a particular sale.

2014 0423 – DOC 812 – Trial Transcript – Day 10 – Walker v LSW – 194p

  • (p200) - re: Target Premium, He - Mr. Martens, Mr. Tivilini
    • He mentioned Mr. Tivilini's e-mail, that Mr. Tivilini said that the probability of lapse was virtually zero if you paid fund at the target premium.
    • There was nothing in there about loans.
    • There was nothing in there about volatility.
    • It was only about if you heavily fund the thing at the target premium, then you have virtually no risk of lapse.
    • I mean, even the fact that he was making a prediction and talking about risk of lapse shows that they understand how important it is that there be risk of lapse.
    • So I don't think that proves what he claims that it proves.

2014 0425 – DOC 813 – Trial Transcript – Day 12 – Walker v LSW – 224p