Accelerated death benefit rider financing approaches

Living benefit riders to life insurance policies—also known as ‘combo’ or ‘hybrid’ policies—have become a core component of life insurance sales strategy. This article, published in June on the Society of Actuaries website, outlines industry practice and consideration for pricing of acceleration-only policies, a hybrid product where riders provide policyholders the opportunity to receive a portion of the policy’s death benefit in advance, under certain conditions. In the article, we discuss the following: 

• Financing methods under NAIC model regulation
• Standards of the Interstate Insurance Product Regulation Commission
• Other jurisdiction variations

Read the full article here.