Many whole life policies
have been purchased with the expectation that policy dividends (current and accumulated) would one day pay premiums.
To address this question, our study employs two pricing-related variables: one for pricing (per-unit premium revenues) directly; and the other, a compositional variable to reflect the mix between term and whole life policies
Some AL policies, similar to many ordinary whole life policies
, use what is called the "direct recognition" method to determine how favorable investment, mortality, and expense experience is allocated to dividends on policies with policy loans.
Although the premium on whole life policies
is usually payable as a level amount for the lifetime of the insured, it can be based on a shorter premium-paying period such as 10 years, 20 years, or to some specified age such as 65.
Because the carrier must guarantee the rate of return on the policy, it must set a low rate (and whole life policies
do just that: The guaranteed rate is usually from 4 percent to 5 percent).
This article demonstrates that rational, well-informed consumers will choose to hold both term and whole life policies
Expected product offerings will include Simplified Issue Term and Whole Life Policies
, Single Premium Deferred and Immediate Fixed Annuities.
Consequently, policyowners bear more risk of adverse trends in mortality or expenses than if they owned traditional whole life policies
For that, there are certain whole life policies
with LTC riders that could be used, and to great effect.
Whole life policies
have a living benefit and a tax-sheltered cash account that builds up inside.
The deep recession of 2008-09, which significantly hurt sales of both variable life and universal life products, also has wrought a positive change in the life insurance industry: People have rediscovered the value of whole life policies
They like the fact that when they purchase whole life policies
, premiums, face amount and cash value are guaranteed.