Changes to the 7702 Definition of Life insurance were enacted with the passage of the Hero’s Act on 12/27/2020. 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.
This was effective for policies issued on or after 1/1/2021.
What Will be the Impact on Life Insurance?
Generally, increases in premium limits mean that more premium can be paid into a cash value life insurance policy 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.
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