General Life Insurance

This overview is intended to give you a general idea of how all the factors previously discussed may affect your policy and how they are relevant to the actual premium you pay for life insurance. If you purchase critical illness insurance, the premiums you pay may fluctuate from year to year if any of these four factors change:

• Mortality experience improves or worsens
• Expenses grow or are reduced
• Interest credits rise or fall
• Persistency increases or decreases

Your premium outlay may potentially be reduced if:

• Interest Rates rise, or
• Mortality Experience improves, or
• Persistency is stable, or
• Expenses drop

Conversely, your premium outlay may potentially increase if:

• Interest Rates decrease;
• Mortality Experience worsens;
• Persistency is negative;
• Expenses increase

The Surrender Charge is the difference between the accumulated value and the surrender value. Depending on the policy, this can be 100% for the first two to five years the policy is in-force, meaning that there would no be no cash value should the policy surrendered during this period. The surrender charge gradually reduces according to a table included in the policy. Typically, surrender charge reduces to zero sometime between the 10th and 15th anniversary of the policy.

• Some contracts provide for future benefit increases. It is important to know in advance whether or not such increases are subject to evidence of insurability. If the insured person’s health deteriorates in the meantime, and evidence of insurability is required before a scheduled benefit increase occurs, this could present a problem.
• Some disability premium waiver provisions waive premiums for the pure term cost of insurance and some waive premiums for the level (permanent) cost. You should know what cost is waived on your policy.
• The mode of premium payment deserves careful consideration.
• Premium rating bands are ranges of coverage amount (e.g., $100,000 to $249,999, $250,000 to $500,000, etc.) in which the higher the amount of coverage, the lower the cost per thousand dollars of coverage.