MAPS Shadow Account Premium Optimization
Over the past 10 years, many carriers have issued universal life policies which provide a guaranteed death benefit for a defined period if the policy owner pays a specified schedule of premiums. These product features are collectively known as Secondary Guarantees and are often marketed as No-Lapse Riders, No-Lapse Guarantees, Coverage Protection Guarantees, etc. Although often difficult to calculate, the correct analysis of the Shadow Account that funds these policies can create significant pricing advantage and market opportunities for life settlement investors.
If you have access to the policy contract and the history of premium payments made since issue, MAPS can perform an analysis of your policy to determine the minimum required future premium under the secondary guarantee structure. This premium may be significantly less than that calculated using standard optimization techniques.
To perform the analysis MAPS will require the following items:
- The Insurance Policy and all applicable policy Riders
- The most recent policy Annual Statement
- A History of Premium Payments since policy issue, including dates and amounts
- A current in force Policy Illustration
The cost for the MAPS analysis is $400 per policy. Using the documents you supply, MAPS will calculate a schedule of projected premiums payable over the future lifetime of the policy. The premiums can be used in your pricing model to enhance your policy valuation. If you are interested in this service, please contact MAPS at info@mapspricing.com to get started.