Survivorship life product changes continue to mirror the major policy evolutions that individual products are experiencing. Whether it is universal, whole or variable life versions, a Jan. 1, 2009 deadline for calculating reserves for all newly issued life policies is forcing companies to quickly adopt the CSO 2001 mortality tables.
Many companies have already adopted the new tables, but some of those have only done so recently. For example, we last covered survivorship UL at the end of 2007. At that time 18 of 43 of the policies utilized the new tables. This time, the new table is featured in 23 of 42 policies, and a few companies were unable to provide information on their leading plans that were being repriced.
Universal life and variable UL products will undergo the most change as the lower reserve requirements mean lower guaranteed cost of insurance and lower guideline premiums. Policies designed for low lifetime, or age 121, guaranteed premiums, of which there are more than ever in this excerpt, will benefit the most. In the end, at most ages, it is the policyholder who will most benefit. In these days of low fixed crediting rates and volatile equities markets, our sometimes beleaguered industry will feel the benefits of greater premium efficiency too.
The Full Disclosure excerpts in this report feature illustrated values for whole, universal, index universal and variable life survivorship products. And while these charts are only slices of the Full Disclosure database, they will give an idea of how these products perform on a prospective basis.
Also included are charts for minimum long-term guarantee products. This increasingly popular use for flexible premium survivorship life insurance provides minimum annual premiums to age 100 or beyond (lifetime) with little or no cash value at maturity, but with low guaranteed annual premiums.