The Effects of Risk Reduction Inherent in Universal Life Insurance: Further Comment

Would prospective buyers of whole life insurance be better off if instead they buy term insurance and invest the difference between the premiums? This question has long attracted the attention of consumers, producers, and students of life insurance. The industry has been critical of the "buy te...

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Bibliographic Details
Published in:The Journal of risk and insurance 1981-12, Vol.48 (4), p.682-689
Main Authors: Rose, Terry L., Hand, John H.
Format: Article
Language:English
Subjects:
Communications and Notes
Cost control
Insurance industry
Insurance policies
Insurance premiums
Insurance providers
Life insurance
Reforms
Savings
Standard deviation
Statistical variance
Term insurance
Term life insurance
Universal life
Universal life insurance
Whole life
Whole life insurance
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Summary:Would prospective buyers of whole life insurance be better off if instead they buy term insurance and invest the difference between the premiums? This question has long attracted the attention of consumers, producers, and students of life insurance. The industry has been critical of the "buy term and invest the difference" philosophy for a variety of reasons, and it has received support from many academicians. [1, pp. 62-63; 2, pp. 208-10; 4, pp. 129-41]. A major contention of those who support whole life insurance is that the whole life contract is more than the sum of a savings plan and a term...
ISSN:0022-4367
1539-6975
DOI:10.2307/252830