Technical Question About UL's

Jun 4, 2008

  1. haaris
    Offline

    haaris New Member

    Posts:
    3
    Likes Received:
    0
    Hello,

    Regarding a UL (yes, I have read my prospectus and done Google searches).

    What is the difference between COI and mortality expense. I know COI is assessed on the amount at risk, and Mortality expense on the CV, but I still do not know the difference. They both sound like the same thing.

    Thanks.
     
    haaris, Jun 4, 2008
    #1
  2. JMO Fan
    Offline

    JMO Fan Guru

    Posts:
    403
    Likes Received:
    1
    It appears you're talking about VUL (variable UL). Mortality & Expense (M&E) is a traditional charge on CV, actually (and actuarially) has little to do with mortality. COI is usually just a mortality charge (on net amount at risk), but can include expense.
     
    JMO Fan, Jun 4, 2008
    #2
  3. Dave020
    Offline

    Dave020 Super Moderator Moderator

    Posts:
    3,354
    Likes Received:
    47
    State:
    California
    Shouldn't this be in the life insurance topic and not the individual health insurance topic? Mods
     
    Dave020, Jun 4, 2008
    #3
  4. NewHealthStrategies
    Offline

    NewHealthStrategies Super Genius

    Posts:
    242
    Likes Received:
    0
    It's not COI.... it's O.I.C.

    As in..... Oh, I see I should have bought term and saved me a bunch of money on my car insurance.....

    opps.... wrong forum category
     
  5. jese
    Offline

    jese New Member

    Posts:
    3
    Likes Received:
    0
    M & E (mortality & expense) charges on VUL cash values are often only loosely related to expected mortality, more to expense. COIs are charged on (death benefit - Cash value), while M&E is charged on cash value. It really makes no sense to charge cash values for mortality, since they are already in the fund -- but tradition calls them M&E.

    Current COI is often the same as mortality charge (and virtually always the same as guaranteed mortality, e.g., 2001 CSO), but some ULs include other expenses in COI as well. Most contracts permit the insurer to change current COI for non-mortality reasons, but some restrict it to changes due to mortality experience. In the 1990s, many carriers added a tax element to current COIs.
     
    Last edited: Jun 24, 2008
    jese, Jun 14, 2008
    #5
Loading...