Term Life Insurance

  • ART - Annual Renewable Term
  • BTID - Buy Term and Invest the Difference
    • Term-ites
    • A.L. Williams
      • Primerica
  • Decreasing Term
  • Deposit Term Life Insurance
  • Group Term
  • Indeterminate Premuim Yearly Renewable Term
  • Level Premium Term
  • Mortgage Insurance
  • Participating Term Life Insurance
  • Term Conversions
    • 1975 - SOA - An Approach to Reserve for Term Insurance Conversion, Society of Actuaries - 36p
  • Term to 100
  • Term Universal Life Insurance
  • YRT - Yearly Renewable Term
  • 1973 - SOA - Price Disclosure and Cost Comparison, Society of Actuaries - 186p
  • 1980 - SOA - Pricing a Select and Ultimate Annual Renewable Term Product, by Jeffery Dukes & Andrew M. MacDonald, Society of Actuaries - 38p
  • 1984 - SOA - Individual Term Portfolio Management, Society of Actuaries - 22p
  • 1991 - SOA - Individual Life Product Development Update, Society of Actuaries - 34p
  • 1994 - SOA - What's New with Term Insurance?, (rsa94v20n21), Society of Actuaries - 20p  
  • 2005 - SOA - Term Mortality and Lapses, Society of Actuaries - 5p
  • Let us look at the question of splitting a life policy into its term and savings elements as an example of injecting the consumer's viewpoint into the current "great debate."
  • Let us assume that a customer wishes to buy insurance protection for a ten-year period and wants to pay level annual premiums.
    • He can purchase a ten-year term policy or a ten-year endowment policy.
    • From a consumer's viewpoint the savings element in the ten-year endowment policy is obviously the difference in premiums between the two contracts.
    • If a customer wants thirty years of protection, and wants to pay level annual premiums, then he might choose between two policies: a thirty-year term with minimum cash values and a thirty-year endowment policy.
    • Despite the fact that there are cash values in the thirty-year term contract, from a consumer's viewpoint it has no savings element.
    • All of the premium is required to provide the thirty years of protection.
    • The savings element in the thirty-year endowment is the difference in the premiums of the two contracts.

--  Paul Overberg

1973 - SOA - Price Disclosure and Cost Comparison, Society of Actuaries - 186p

  • First, with respect to the new term policies, we are seeing a definite shift in the term marketplace, away from the ART policies, which emphasized low first-year cost, toward the newer level term policies, which emphasize low average cost.
  • Features frequently associated with these newer level term policies are: term periods from 7-15 years, with 10 years definitely predominating; low, competitive "current" premiums; muitiyear premium guarantees, (at the "current" level) often for the full term; reentry options at the end of the first term period, usually requiring evidence of insurability; and automatic renewal on a YRT basis at the end of the level term period.
  • There are alternative designs such as: five-year level term policies, where the premium rates for the first renewal period (years 6-10) is also guaranteed at issue resulting in a full 10-year premium guarantee of a step-rated premium; 10- or 15-year level term policies without a YRT renewal option, both with and without the reentry option; premium guarantee periods, shorter than the level term period, combined with a premium bail-out (the premium bail-out is the refund of one year's premium, if the rates for the nonguaranteed portion of the level term period are raised above the initial projected level); and optional guaranteed reentry rider, marketed with some of these products.

--  Pamela M. Crane

1991 - SOA - Individual Life Product Development Update, Society of Actuaries - 34p

  • William K. Tyler: As Denise mentioned, during 1984, the term "rate war" of the previous years has seemed to stop in its tracks to a large degree.
  • Walter MILLER: I would like to ask Bill, where did you derive the statistic that the average term policy lasts two years?
  • MR. TYLER: That information came from a LIMRA survey. I am not sure exactly what their statistical base was for making that conclusion, but it sounds long to me.
  • Denise FAGERBERG: I think Dr. Arthur Williams at Penn State University did a survey for LIMRA and found the average term policy was in force 22 months before it lapsed.
  • MR. MILLER: The average term coverage stays in force longer than that but transmutes itself in interesting ways in different companies.
    • That is part of what we are here to cry on each others shoulders about.

1984 - SOA - Individual Term Portfolio Management, Society of Actuaries - 22p