Changes to the 7702 Definition of Life insurance were enacted with the passage of the Consolidated Appropriations Act on 12/21/2020. This change lowered the interest rates and increased the premium limits defined by the regulation. This includes the Guideline Level, Guideline Single and 7Pay TAMRA premium limits.
What Is the Impact on IUL Illustrations?
Generally, increases in premium limits mean that more premium can be paid into IUL for a given death benefit. Or in other words, a lower death benefit can be selected for a given amount of premium leading to higher accumulation and income values. The impact will vary by age, face amount and underwriting class so we encourage you to rerun any recent illustrations where premium limits came into play.
Increases in GSP, GLP and TAMRA premiums will be greater where mortality is lower. Which means:
What Is the Impact on IUL Illustrations?
Generally, increases in premium limits mean that more premium can be paid into IUL for a given death benefit. Or in other words, a lower death benefit can be selected for a given amount of premium leading to higher accumulation and income values. The impact will vary by age, face amount and underwriting class so we encourage you to rerun any recent illustrations where premium limits came into play.
Increases in GSP, GLP and TAMRA premiums will be greater where mortality is lower. Which means:
- Increases will be greater at younger issue ages than old issue ages
- Increases will be greater for non-nicotine users than nicotine users
- Increases will be greater for females than males
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