How to Read and Understand a Current Assumption Whole Life (CAWL) Insurance Proposal Ledger

It is important to understand your Current Assumption Whole Life (CAWL) Insurance Proposal Ledger. The principal source of information regarding a new policy is the policy illustration or ledger. The table above shows an annotated policy illustration with the following commentary.

  1. Base mandatory premium combined with a rider (similar to a paid-up additions rider for a traditional whole life policy) which accommodates additional money, resulting in an annual payment of $2,001.
  2. Insurability classification for this company. Preferred means nonsmoker and not rated extra because of medical and occupational reasons.
  3. Gender and issue age–male, age forty-five.
  4. This is an end-of-year ledger statement.
  5. Base premium of $732.94 that must be paid each and every year that the policy is in force.
  6. Rider premium of $1,268.06 in addition to the mandatory base premium of $732.94. In year twenty-one and for every year thereafter, $732.94 is withdrawn [minus sign (-)] from the rider to pay the base premium of $732.94.
  7. Total premium is $2,001, consisting of $732.94 base premium and $1,268 paid into the rider. $2,001 is paid each year for twenty years. Starting in year twenty-one and every year thereafter, the premium outlay is zero. Base mandatory premium of $732.94 is paid by withdrawing $732.94 each year from the rider.
  8. Total death benefit.
  9. Accumulation account money.
  10. Total cash value.
  11. Life expectancy is twenty-nine years for a forty-five-year-old, or to age seventy-four.

Reproduced with permission.  Copyright The National Underwriter Co. Division of ALM

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