Portfolio Monitoring

There is only one thing that can be said with certainty about hypothetical policy values in a life insurance illustration. They are not intended to be an accurate prediction of future policy values. Instead, they are simply a projection of policy performance based on a number of non-guaranteed pricing assumptions as to cost of insurance, premium loads, fixed administration expenses and cash-value-based "wrap" fees all of which can be subject to change at the sole discretion of the issuing insurer.

Planned premiums shown on the policy illustration will, in all likelihood, not be the same as actual premiums required to realize illustrated policy benefits. Similarly, illustrated policy cash value will, in all likelihood, not be the same as actual cash values reported on annual policy statements. Even death benefits can differ from illustrated policy death benefits, and in some cases, not be paid at all due to actual policy performance that differs from illustrated hypothetical policy values.

As such, periodic policy monitoring and reconciliation of actual policy values to hypothetical policy values from the as-issued and/or inforce life insurance illustration is just as important for life insurance portfolios as it is for any other financial instrument. Included in Measurement is such a reconciliation of all policy components to include premiums paid, less premium loads, less cost of insurance charges, less fixed administration expenses, less cash-value "wrap fees", plus interest/earnings and the resulting cash values.