Project - How the Policy Works / Policy Mechanics

  • Until the buyer understands how the product works, attempts to compare price are essentially meaningless.

1972 - SOA - Life Insurance and the Buyer, by Anna Rappaport, Society of Actuaries - 2p-Article

  • (p170) Mr. Brosnahan said: Well, the fees can cause policies to lapse. Is that a secret?
    • I mean, fees cost something. That's the point of fees. If someone puts money into their policy, there will be fees, as they know, coming out of those policies.
    • If you don't put enough premiums into your policy, over time the fees will keep decreasing the value of the policy. That's what fees do.
    • That's not a defect in the policy. That's how policies work. 
  • (p171) - The fact that we charge people fees that we have disclosed and that fees reduce the value of your policy, and if your policy keeps reducing in value, it will lapse, is not a fraud.
    • That's common sense. That's how life insurance works.

2014 0425 - LC - Walker vs Life Insurance Company of the Southwest, LSW - DOC 813 - Trial Transcript - 224p