CAWL is indicated when a person wants the fixed premium, “forced savings” feature of traditional whole life and the potential for better investment results than those guaranteed in traditional policies. CAWL has a minimum guaranteed cash value accumulation, but the policyowner bears the risk that the investment performance and mortality experience of the company will be less favorable than originally assumed. The insurer may have to periodically increase required premiums or decrease the face amount of coverage if performance does not meet expectations.
Reproduced with permission. Copyright The National Underwriter Co. Division of ALM