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.
- 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.
- Insurability classification for this company. Preferred means nonsmoker and not rated extra because of medical and occupational reasons.
- Gender and issue age–male, age forty-five.
- This is an end-of-year ledger statement.
- Base premium of $732.94 that must be paid each and every year that the policy is in force.
- 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 In year twenty-one and for every year thereafter, $732.94 is withdrawn [minus sign (-)] from the rider to pay the base premium of $732.94.
- 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.
- Total death benefit.
- Accumulation account money.
- Total cash value.
- 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