Full Disclosures Whole Life Report
This report features the leading whole life companies active in mid- to upper markets, with information pulled from an annual database compiled by the editors of Full Disclosure. By using these tables one can get an idea of how policies are currently being illustrated, as well as how leading plans issued by many of these insurers 10 and 20 years ago have returned value to policyholders historically.
As for the market, the number of companies selling whole life is holding steady after some insurers purged the product from their portfolios during demutualization and a simultaneous move to variable products. As we have mentioned in this column previously, those that still sell whole life–or even more, make it a pillar of their overall product portfolio–are enjoying strong sales growth.
Demutualization is past for now, but consumer perception of equity risk remains very high. A lifetime cash value whole life plan will, at the very least (at the guaranteed level), provide no surprises when it comes to premium, death benefit and cash value.
Another product enjoying renewed popularity (even in light of lowered interest crediting rates) is universal life structured with second-generation guarantees of premium and death benefit. These guarantees can, if certain conditions are met, guarantee the premium and death benefit at a usually lower cost than whole life. (See NU, March 31, 2003, for Full Disclosures most recent UL survey.)
Twenty participating (dividend-paying) contracts are featured on an illustrated basis with 13 reporting actual results. This compares with 21 projections last year with nine historical samples. All data are current as of Feb. 1, 2003, by which date many insurers declared their dividend scales for 2003.
Companies that have a later dividend scale revision, such as Sun Life (on April 1) were asked to illustrate values based on the upcoming dividend scale.
Additions to this report include Sun Life and Manulife Financial, which was inadvertently left out last year. General American Life and New England Financial declined to participate this year, with the parent company MetLifes product represented instead.
There are three parts to this report excerpted from the latest edition of Full Disclosure. Charts contain current illustrated values and historical performance. A section also covers strengths attributable to each plan as outlined by the companies reporting their whole life information.
Illustrated values are based on a Male Age 40 paying on a $250,000 policy. The class specified is best nonsmoker as long as the class represents at least 15% of the contract issued of each policy. Illustrations are divided between all base (100% whole life coverage) and policies blended with 50% term.