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Earnings: Variable life and variable universal life policies earn a rate of return that is directly related to the performance of invested assets underlying policy cash values (instead of the declared rate in UL and WL policies that is indirectly based over time on the performance invested assets underlying policy cash values) and are required to fully disclose all policy expenses, including investment expenses and management fees. Variable policy cash values can also be directed into a family of mutual-fund-like "separate accounts", typically including an assortment of domestic and foreign stock funds, an array of domestic and foreign bond funds, a money market account, and usually a fixed account (i.e., similar to an account into which UL and WL policy cash values are invested). Because variable policy cash values can be allocated and managed according to the investment objective, holding period and risk tolerance for each situation, expected returns for variable policies can vary from 8.0% for a conservatively-managed portfolio, to 10.0% for a portfolio allocated for a moderate-investor temperament, to as much as 12.0% or more for an aggressively-managed portfolio (Source: www.advisoryworld.com). As such, the Policy Pricing Calculator will produce the most reasonable approximation of VUL premiums and costs when using an Average Net Rate of Return most closely correlates with the historical return for the asset classes into which cash values are to be invested. On the other hand, to compare the pricing of a particular policy to TIA Benchmark premiums and costs, use an Average Net Rate of Return equal to that of the policy you are comparing.

Endowment: The point at which a policy’s cash value equals its face amount. For policies satisfying the definition of life insurance under IRC §7702, endowment/maturity can occur no sooner than age 95. [Also see maturity.]

Expense charges: Charges made on accumulation-type policies to reimburse the insurer for a portion of its costs of issuing and maintaining the policy. Some expense charges are deducted from the gross premiums paid. Other are monthly charges deducted from the accumulation value.

Experience-rated pricing: Policies identified as "Experience-Rated" are designed to more closely reflect the actual claims experience and operating expenses for a particular market segment, distribution channel, or segregated pool of insureds, and are therefore typically only available to policy holders meeting certain minimum financial requirements, insureds of certain insurers, and/or clients of certain distribution systems. "Experience-Rated" policies often involve high minimum policy face amounts and/or high minimum premium requirements, are commonly referred to as "Proprietary", "Private Placement", or "Accredited Investor" products, and may or may not be registered with the State Department of Insurance for protection/insulation against adverse pricing changes. In addition, depending upon the actual claims experience and operating expenses for the risk pool underlying each given product, "Experience-Rated" policies can include low or high Cost of Insurance (COI) Charges, and/or low or high Fixed Administration Expenses, and/or low or high Premium Loads, and/or low or high Cash-Value-Based "wrap fees", and usually low or no Termination Fees (i.e., Surrender Charges).