Full Disclosure Survivorship Life Report

Full Disclosure applies the internal rate of return method to current illustrated accumulation values and current death benefits measured at policy durations 30 years dependent on age combination. The IRR of cash values rise over time, as the IRR for the death benefits falls. A careful analysis of the IRR measurements indicates which policies are designed (in an illustration at least) to build current cash values, guaranteed cash values, or death benefits.

You will notice at the end of the SVL and SUL charts that there are columns showing how the policy would have performed under an increasing death benefit option. The cash value of an increasing death benefit policy, while not listed, would be lower because of the added costs of insurance. The whole life policies have naturally rising death benefits due to the paid-up additions dividend option.

Standardized annual premiums are the same between UL and VL illustrations, and issue classes are likewise the same across the three policy types. The VL illustrations are based on an 8% (down from the 10% we specified earlier) gross rate of return with average subaccount expenses "netted out" of the projected values.

Full Disclosure not only examines premiums and illustrated values, but also gets to the heart of what each policy is designed to do best. Because survivorship life products are designed for certain objectives, whether maximum cash accumulation or none at all, for example, we have summarized what each is designed for. Some have simplified underwriting, short-term values, living benefit riders, or many others. The full picture of a product's strengths, weaknesses, and its fundamental design objective can only by realized by examining its complete policy specifications and features, current and guaranteed costs and expenses, and a wide sampling of illustrations.

Please see the footnotes at the bottom of each table that may reveal important differences between products, or in ways that they were illustrated by insurers. As mentioned earlier, some of the policies in this report are not designed for cash value accumulation, but for minimum long-term guaranteed premiums. It is on that basis primarily that any comparison to other products should be done.