Multiple Life Joint Life Policies in Universal Life (February, 2007)
In the February, 2007 release of AXIS 12.0 new functionality to support the valuation and modeling of in force multiple life joint life policies including up to 10 lives was added to the Universal Life module.
In the February, 2007 release of AXIS 12.0 new functionality to support the valuation and modeling of in force multiple life policies including up to 10 lives was added to the Universal Life module.
In the Universal Life module, AXIS already supports joint life policies on 2 lives, both first to die and last to die, with the capability to specify issue ages and mortality tables explicitly for each life. AXIS applies a frazierization to the assumed mortality for pricing and for valuation purposes, and will perform similar calculations to produce joint life premiums and joint life risk charges based on two lives.
The new functionality opens up the option to specify as many as 10 separate lives as being insured together under either joint life first to die, or last to die insurance, provided however that the lives are modeled as in force lives in the seriatim data passed to the Cell from DataLink. A new DataLink table has been added to accept multiple records per seriatim Policy ID, defining the issue age and the Risk Class for each of the joint lives. The Risk Class identifiers specified enable AXIS cell calculations to extract the appropriate single life mortality rates by age and risk class using Rules Tables selected in the primary Mortality table slots in the Cell assumptions. The use of a single Rules Tables for this multiple life joint life mortality assumption means that the Life 2 Mortality Table normally used for Joint Life policies in UL is not required.
Mortality Rules Tables supporting joint life mortality rates based on multiple lives may be used for the following assumptions in addition to basic Pricing and Reserve mortality in the Universal Life cells:
- AIDS Extra mortality in Pricing and Reserves sections
- T5 Mortality in the Policyholder Tax section
- Exempt Test Policy Mortality in the Policyholder Tax section
- Mortality in the Premium Calculation [Composite] table section
- Risk Charges and Ceded Risk Charges in the Joint Life Risk Charge [Composite] table section
- Mortality in the Input Factor for NAAR [Composite] table section
When Joint Life Ceded Risk Charges are calculated, the ages used for the ceded risk charge calculation will be the same ages as used for the direct mortality assumptions.
All other assumptions and product features not specified in the above list are based on single product ages, as is the case for the existing two-life Joint Life calculations.