PROFILPELAJAR.COM

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Merging in "Actual cash value"

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I suggest merging the short article Actual cash value into this one. Neither article is long, and the terms are so related that they really should be together, IMO. We would leave redirect from the ACV article. (Will send invite to the ACV page author, User:Wolf530.) 2*6 06:38, 8 January 2007 (UTC)[reply]__DTELLIPSISBUTTON__{"threadItem":{"timestamp":"2007-01-08T06:38:00.000Z","author":"Dozen","type":"comment","level":1,"id":"c-Dozen-2007-01-08T06:38:00.000Z-Merging_in_\"Actual_cash_value\"","replies":["c-Dozen-2007-01-08T06:49:00.000Z-Dozen-2007-01-08T06:38:00.000Z"],"displayName":"2*6"}}-->

heh. I already have second thoughts. ACV is specific to property&casualty insurance, while CV is specific to life insurance. —The preceding unsigned comment was added by Dozen (talk • contribs) 06:49, 8 January 2007 (UTC).[reply]__DTELLIPSISBUTTON__{"threadItem":{"timestamp":"2007-01-08T06:49:00.000Z","author":"Dozen","type":"comment","level":2,"id":"c-Dozen-2007-01-08T06:49:00.000Z-Dozen-2007-01-08T06:38:00.000Z","replies":["c-Wolf530-2007-01-08T07:45:00.000Z-Dozen-2007-01-08T06:49:00.000Z"]}}-->

Agree with directly above -- two different lines of insurance we're talking about. I can see where the thought process comes in, but they really aren't related :) --Wolf530 (talk) 07:45, 8 January 2007 (UTC)[reply]__DTELLIPSISBUTTON__{"threadItem":{"timestamp":"2007-01-08T07:45:00.000Z","author":"Wolf530","type":"comment","level":3,"id":"c-Wolf530-2007-01-08T07:45:00.000Z-Dozen-2007-01-08T06:49:00.000Z","replies":["c-Dozen-2007-01-08T18:25:00.000Z-Wolf530-2007-01-08T07:45:00.000Z"]}}-->

I concur. Withdrawing suggestion. 2*6 18:25, 8 January 2007 (UTC)[reply]__DTELLIPSISBUTTON__{"threadItem":{"timestamp":"2007-01-08T18:25:00.000Z","author":"Dozen","type":"comment","level":4,"id":"c-Dozen-2007-01-08T18:25:00.000Z-Wolf530-2007-01-08T07:45:00.000Z","replies":[],"displayName":"2*6"}}-->

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Guaranteed cash value

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The final paragraph already discussed GCV, and there is no pre-existing article for it. So I put a section header on it, and even linked directly to the section from Whole life insurance. Please don't delete the section header. WP:MOS#Section management If you want to update the contents of the section, cool. :) – 2*6 01:23, 16 January 2007 (UTC)[reply]__DTELLIPSISBUTTON__{"threadItem":{"timestamp":"2007-01-16T01:23:00.000Z","author":"Dozen","type":"comment","level":1,"id":"c-Dozen-2007-01-16T01:23:00.000Z-Guaranteed_cash_value","replies":[],"displayName":"\u2013 2*6"}}-->

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Is Any Of This Correct?"

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This article essentially claims that the $ you get on cancellation of a policy, grows with time as you pay more premiums and as time passes so that profits compound. It strongly implies behind the wierd wording that this is the pot of cash that funds the eventual Face Value death benefit if NOT surrendered. E.g. " Such cash valueakeeps growing with every payment of premium. It also increments due to interest credited. .....The cash value will often be similar or even equal to the reserve to be held by the insurance company for the net obligations from the contract."

But all that is contradicted by most everything I have read, and even the very first post to this page. Everyone else says that from this pot of cash is taken every month the mortality costs faced by the insurance corp. The final Face Value is a liability of the Corp, financed by its monthly draws from your account. The CSV grows in the early years when Premiums are greater than the low cost of insurance (mortality costs) because you are young. Then later, after the mortality costs have risen, they grow larger than both the flat premiums plus any accruing profits. This leads to the CSV shrinking - shrinking to zero theoretically.

A document from SunLife Insurance for their Universal Life policy says on page 9 ..."When we receive a payment for this policy, we deduct premium tax. We then add the remaining amount to your policy fund (ie. Cash value)....... Each monthly anniversary, we deduct money to pay for the cost of insurance."

Where are the references? 174.6.213.48 (talk) 19:38, 1 September 2016 (UTC) Edited later 174.6.213.48 (talk) 13:00, 28 October 2016 (UTC)[reply]__DTELLIPSISBUTTON__{"threadItem":{"timestamp":"2016-09-01T19:38:00.000Z","author":"174.6.213.48","type":"comment","level":1,"id":"c-174.6.213.48-2016-09-01T19:38:00.000Z-Is_Any_Of_This_Correct?\"","replies":["c-Stelio-2018-06-04T14:07:00.000Z-174.6.213.48-2016-09-01T19:38:00.000Z"]}}-->

@174.6.213.48: Broadly speaking, for a portfolio of life insurance business, money comes into the insurer in the forms of (1) premiums and (2) investment returns on reserves held, and money goes out for (1) benefit payments and (2) expenses. There are different types of contract with varying levels of protection and savings.

A term assurance contract is purely protection: it pays out a benefit on death of the assured life within the term of the contract, but nothing if that person survives to the end of the term. The insurer only needs to hold money in reserve to cover the expected death benefits, and can let the reserves run to zero by the end of the term (since there is no payout on maturity). Hence these contracts have low reserves, and if the policyholder chooses to terminate the contract early then they lapse with no value.
In contrast, an endowment assurance has elements of both protection and savings: the insurer pays out a lump sum if the assured life dies within the policy term or survives to the end of the term. Essentially, the policyholder will always get the sum assured, and only the timing of the payment is uncertain (at the end, or on earlier death?). The insurer needs to build up reserves over time (mainly from premium income) in order to fund the expected maturity benefit (as well as possible earlier death benefits). The reserves are high and tend towards the sum assured at maturity. If a policyholder terminates the contract early, they receive some payout for the savings that they have built up over time.

As I read it, your first paragraph seems to be referring to contracts with a savings element (and therefore a reserve the builds up to maturity) whereas your second paragraph refers to a contract with purely a protection element (and therefore the reserves drop to zero at maturity). -Stelio (talk) 14:07, 4 June 2018 (UTC)[reply]__DTELLIPSISBUTTON__{"threadItem":{"timestamp":"2018-06-04T14:07:00.000Z","author":"Stelio","type":"comment","level":2,"id":"c-Stelio-2018-06-04T14:07:00.000Z-174.6.213.48-2016-09-01T19:38:00.000Z","replies":[]}}-->