Abstract:
A method and system of appraising a life insurance or annuity product includes receiving a request for a life insurance or annuity product and information about a party requesting the life insurance or annuity product; preparing a bid solicitation for the life insurance or annuity product based on the request and information and transmitting the bid solicitation to a plurality of product carriers; a plurality of product carriers submitting initial proposals for providing the life insurance or annuity product; generating ratings for the initial proposals, respectively; and generating appraisals for the initial proposals; and informing the product carriers of the decision.

Description:
BACKGROUND OF THE INVENTION 
     1. Field of the Invention 
     The present invention relates to an automated system for appraising value to consumers of a life insurance or annuity product, and more particularly, to a computer-based value appraising system. 
     2. Discussion of the Related Art 
     The financial services industry consists of industry segments such as insurance and banking. In turn, the insurance industry consists of industry segments such as life insurance, health insurance, and property and casualty insurance. 
     The life insurance industry includes product markets such as term life insurance, life insurance, variable life insurance, annuities, joint products, viatical settlements, preneed insurance, and long-term care insurance. Insurance carriers sell life insurance products through various distribution channels such as captive agents, independent agents, banks, affinity groups, and financial planners. 
     The present life insurance product markets for both insurance product proposals and in-force insurance products are inefficient. For insurance product proposals, the problem stems from: (1) an inadequate exchange of information between consumers and insurers during the selling process and, (2) the absence of a real-time auction market in which to price life insurance product proposals. Inefficient product markets for in-force insurance products stem from the absence of a system for measuring an insurance product&#39;s performance while that product is in-force. 
     An inadequate exchange of relevant and available information between consumers and insurers during the selling process is a significant source of product market inefficiency. Typically, consumers often do not receive relevant and available information necessary to make an informed purchase decision. Also, insurers frequently do not receive relevant and available information on the consumer and current market pricing necessary to tailor their proposals for optimal product performance and pricing. Such inefficient transmission of information results in product market inefficiency. Such product market inefficiency in the insurance industry adversely affects consumers and insurance companies. 
     Moreover, many life insurance products have complex features that consumers do not understand. Consumers&#39; lack of insurance product knowledge opens the door to misleading sales practices such as twisting, churning, and vanishing premiums. Product “gimmickry,” such as lapse basing, preys on a consumer&#39;s inability to detect its existence. Recent, widely publicized accounts of race-based underwriting indicate that market conduct problems can go undetected for years by consumers, insurance company managements, and insurance industry regulators. Insurance industry regulators have attempted to enforce market conduct standards. Insurance companies have sought to curtail sales abuses. Their efforts have not solved the problem. 
     Market conduct problems occur regardless of an insurance company&#39;s financial strength. Favorable financial ratings are no indication of an insurer&#39;s compliance with market conduct standards. Independent rating firms evaluate an insurer&#39;s claims paying ability. They do not rate the products sold by insurers. The life insurance industry has no product rating system that appraises a proposed insurance product&#39;s total value to the consumer. 
     These and other market conduct problems point to the need for a system that assists the consumer in appraising a proposed insurance product&#39;s value. 
     The absence of a real-time auction market in which to price life insurance product proposals is a source of product market inefficiency. Currently, whether life insurance products are sold on the Internet or sold offline, the products are sold in a “fixed-priced” market. Typically, during the sales process, consumers and insurers cannot obtain real-time, market pricing information for products that are tailored to individual consumer needs. Thus, both consumers and insurers are deprived of opportunities to improve pricing before the sale closes. Consequently, some insurance products may be priced too high. In other cases, product prices may be too low. 
     Some insurers presently post fixed pricing information for standard products on the Internet, making it easier for consumers to compare prices for certain products. The Internet has made available more pricing information to consumers than ever before. However, while price comparisons allow the consumer to seek the lowest price for such fixed-price products, these price comparisons provide no other information to allow for an appraisal of the total value proposition. 
     Similarly, existing policyholders have no means for evaluating the performance of their in-force insurance policies. No system exists in the marketplace for appraising an in-force product&#39;s continuing value to the consumer. 
     Moreover, price is only one element in appraising an insurance product&#39;s total value proposition. No available systems provide consumers with information other than price to facilitate informed purchase decisions. Consumers need a system that appraises the total value proposition of life insurance product proposals. Such a system would lead to stronger product market efficiency. 
     In addition, even though present systems allow for price shopping on the Internet by consumers, from the insurer&#39;s perspective, such price shopping commoditizes insurance products. Thus, insurers are forced to compete on price alone and cannot differentiate products that provide other “non-price” value for consumers. Consequently, the attractiveness of the industry&#39;s structure declines, competitor rivalry increases, weak product substitutes proliferate, and entry barriers become lower across product markets. These structural changes squeeze margins and erode industry-wide profitability. 
     SUMMARY OF THE INVENTION 
     Accordingly, the present invention is directed to an evaluating system for a life insurance or annuity product that substantially obviates one or more of the problems due to limitations and disadvantages of the related art. 
     An advantage of the present invention is to provide an on-line, real-time system for evaluating a proposed life insurance or annuity product. 
     An advantage of the present invention is to provide an on-line, real-time system for evaluating an in-force life insurance or annuity product. 
     An advantage of the present invention is to provide an on-line, real-time system for evaluating a replacement life insurance or annuity product. 
     Another advantage of the present invention is to provide a system that creates efficient product markets for the benefit of the life insurance industry and its customers. 
     Another advantage of the present invention is to provide a system that enables insurance companies and insurance distribution channels to better serve their customers and to improve industry-wide profitability 
     Another advantage of the present invention is to provide a system to improve product pricing by pricing insurance products in an auction-style market. 
     Another advantage of the present invention is to provide a system for evaluating the current performance of an in-force life insurance or annuity product. 
     Additional features and advantages of the invention will be set forth in the description which follows, and in part will be apparent from the description, or may be learned by practice of the invention. The objectives and other advantages of the invention will be realized and attained by the structure particularly pointed out in the written description and claims hereof as well as the appended drawings. 
     To achieve these and other advantages and in accordance with the purpose of the present invention, as embodied and broadly described, a method of appraising a life insurance or annuity product includes the steps of receiving a request for a life insurance or annuity product and information about a party requesting the product; preparing a bid solicitation for the product based on the request and information and transmitting the bid solicitation to a plurality of product carriers; at least one of the plurality of product carriers providing a proposal for providing the life insurance or annuity product; automatically generating a numerical rating corresponding to each proposal and providing the numerical rating to the corresponding product carrier; allowing the plurality of product carriers to revise the proposals based on the numerical rating; the product carriers providing a final proposal; and generating an appraisal for each of the final proposals. 
     It is to be understood that both the foregoing general description and the following detailed description are exemplary and explanatory and are intended to provide further explanation of the invention as claimed. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       The accompanying drawings, which are included to provide a further understanding of the invention and are incorporated in and constitute a part of this specification, illustrate embodiments of the invention and together with the description serve to explain the principles of the invention. 
       In the drawings: 
         FIG. 1  is a block diagram that illustrates a preferred embodiment of the present invention. 
         FIG. 2  is a block diagram that illustrates parties involved in a business transaction according to the preferred embodiment of the present invention. 
         FIG. 3  is a block diagram that illustrates an embodiment of the present invention appraising the continuing value proposition to the policyholder of an in-force life insurance policy or annuity. 
         FIG. 4  is a block diagram that illustrates an embodiment of the present invention for a policyholder to query a product value appraisal system without the aid of a distribution channel. 
         FIG. 5  is a block diagram that illustrates an embodiment of the invention appraising the value proposition for replacing an in-force life insurance policy or annuity. 
         FIG. 6  is a block diagram that illustrates an embodiment of the present invention for a policyholder to query a product value appraisal system for rating an in-force life insurance policy or annuity. 
     
    
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS 
     Reference will now be made in detail to the preferred embodiments of the present invention, examples of which are illustrated in the accompanying drawings. 
     The present invention relates to an evaluating system for a life insurance or annuity product under consideration for purchase, the ongoing value of a life insurance or annuity product already owned, or replacing a life insurance or annuity product. In addition, either as a separate process or in conjunction with this process, the product value appraisal system of the present invention enables an on-line, real-time auction process for pricing life insurance and annuity products. The present invention provides a system for appraising a life insurance or annuity product&#39;s total value proposition to the consumer. The product value appraisal system operates preferably via the Internet, but may be configured to work off-line or via a closed network or Intranet. The system is configured to support all categories of insurance transactions including, business-to-business, business-to-consumer, and business-to-employee. The system appraises life insurance product and annuity proposals as well as life insurance and annuity products that are in-force and replacement product proposals. 
     The present invention is applicable to a number of financial products within the life insurance industry, as well as annuities. Within the market for life insurance, there are a variety of products for which a system for appraising value is most useful. Term life policies provide a death benefit for a limited number of years after which they expire without value. They may insure the life of one person, or provide protection on the lives of two people (Joint Term policies). Joint Term policies are of two types: those that pay the death upon the first death to occur and those that pay upon the second death during the term. 
     Term products may have non-guaranteed premium structures (participating policies that pay dividends or “indeterminate premium” plans that feature a guaranteed maximum premium scale, but provide for the opportunity to pay a lower current premium based on current experience of the insurer) or fully guaranteed premiums that never change (non-participating plans). Term plans that provide a death benefit that is a constant amount over the term period may be renewable at the end of the term (e.g., Annually Renewable Term, 5-Year Renewable Term, etc.). A subset of renewable term plans is Reentry Term, which provides the opportunity for a lower renewal premium than otherwise available if the insured can provide evidence of continuing good health. Non-renewable term plans include 20-Year Term and Term to Age 65. Term plans that provide a death benefit that decreases over the term period are generally non-renewable and are purchased to insure a specific need. Mortgage Protection Term, often sold in connection with new residential home loans is a good example. 
     Ordinary life insurance plans are conceptually designed to provide death protection for the insured&#39;s entire lifetime. Unlike term life, they commonly provide for the accumulation of cash values that are available to the insured should the policy need to be terminated prior to death. Premiums for Ordinary Life can be structured to be payable for life or some finite number of years. Single Premium Life forms are even available. All Ordinary Life plans are generally available in joint life insurance (first-to-die) and joint and last survivor insurance forms in addition to single life forms. In order of decreasing guarantees (increasing risk) to the purchaser, these plans fall into the following types: nonparticipating whole life, indeterminate premium whole life, participating whole life, interest sensitive whole life, universal life insurance, variable whole life and variable universal life. 
     Nonparticipating whole life provides for guaranteed level premiums and a guaranteed death benefit with fully guaranteed cash values. The insurer assumes all risks and the purchaser does not participate in experience more favorable than the insurer&#39;s guarantees. 
     Indeterminate premium whole life insurance is a version of nonparticipating whole life insurance with indeterminate premiums, which is discussed above with regard to term life insurance. 
     Participating whole life insurance is similar to nonparticipating whole life, but offers the opportunity to receive annual dividends from the insurer if experience is more favorable than guarantees. 
     Interest sensitive whole life insurance is a version of nonparticipating whole life insurance under which the insurer credits excess interest over and above the policy&#39;s guarantee to the policy&#39;s cash values as current conditions warrant. 
     Universal life insurance is a version of nonparticipating whole life under which the insurer provides guarantees as to maximum charges for expenses and the mortality risk and minimum interest rates, but the amount of premium is based on current charges and interest rates. Thus, the insured is assuming a fair amount of risk with respect to future experience, primarily concerning interest rates. Considerable flexibility is provided for changes in the amount and timing of premium payments and the amount of the death benefit as well the ability to make withdrawals from the cash values. There is consequently no guarantee that the policy will be in effect at the insured&#39;s death if proper adjustments are not made in the premium payment pattern. This is a significant difference from the four types of Ordinary Life described above. 
     Variable whole life insurance is a form of nonparticipating whole life under which the insured assumes substantially all of the investment risk, including the risk of fluctuations in principal value as well as the interest rate risk. Fixed level premiums are provided, but the death benefit and cash values fluctuate with the investment performance of the mutual funds selected by the insured for investment of the premiums. There is a minimum guaranteed death benefit payable whenever the insured&#39;s death occurs. 
     Variable universal life insurance is a combination of variable whole life insurance and universal life insurance. Variable universal life insurance represents the life product type with the fewest traditional insurer guarantees and thus the greatest assumption of risk by the insured. In return for assuming this risk, the insured has the upside potential of receiving a significant better value in favorable economic environments than under the other product types. 
     As shown in  FIG. 1 , the product value appraisal system of the present invention simultaneously solicits, prices, and rates life insurance and annuity policy proposals.  FIG. 1  illustrates a “business-to-business” transaction. 
     A party seeking a life insurance or annuity product, the proposed insured  104 , requests a life insurance or annuity product through a distribution channel  108  that sells such products to consumers, as illustrated by step  1  in  FIG. 1 . The proposed insured  104  also provides the distribution channel  108  with information necessary for the distribution channel to request proposals from carriers who sell that product type. This information includes the risk profile of the proposed insured  104  for the product. Demographic and risk profile data include, for example, the proposed insured&#39;s age, sex, smoking habits, amount of insurance or annuity benefit desired, the pattern of premium payments and the pattern of disbursements desired from the product. 
     Next, the distribution channel  108  transmits to a product value appraisal system (“PVAS”)  112  information provided by the proposed insured  104 , including the demographic and risk profile information as inputs to the product value appraisal system  112 , as illustrated by step  2  of  FIG. 1 . 
     Then, the product value appraisal system  112  initiates bidding and/or invites proposals from interested product providers or carriers  116  by sending a proposed opening bid or invitation for proposal to a participating insurance carrier  116 , as illustrated by step  3  of  FIG. 1 . The opening bid provided by the product value appraisal system  112  may include an opening price with a minimum product rating. 
     After initiating bidding or inviting proposals, the product value appraisal system  112  proceeds in an on-line, real-time, iterative process with the insurance carriers  116 , as illustrated by step  4  of  FIG. 1 . Upon receipt of a bid or proposal from a participating insurance carrier  116 , the product value appraisal system  112  reviews each bid or proposal and rates the bid or proposal and the pricing of each bid or proposal. 
     With each product proposal, the insurance carrier will transmit information about the price and benefits of its product along with identifying information about itself. This data includes data about the product&#39;s proposed benefits and price on both a guaranteed and illustrated basis, and information about the insurance company proposing the product. Product data include the proposed premiums to be paid and the proposed benefits to be provided, both distinguished between guaranteed amounts and illustrated amounts that depend on assumptions about the future. The insurance company information includes data that quantifies the financial strength of the insurance company. The product value appraisal system  112  will use appropriate actuarial assumptions, such as mortality information specific to the end customer&#39;s risk profile, and traditional actuarial present value methodology to determine a numeric rating of the benefits offered in light of the proposed price, the Product Value For Money, as represented in  FIG. 1 . Numeric ratings will also be assigned to other key scoring drivers: the product&#39;s performance under less optimistic assumptions about future interest rates and at lower premium levels (Product Stress Tolerance); various company financial information (Management Performance); previous interest rates actually credited to the product&#39;s values (Historical Credited Rates); various qualitative measures of customer service (Customer Service Quality); and the financial strength of the product provider (e.g., A.M. Best Rating). The numeric ratings for these six scoring drivers will then be weighed to arrive at an overall rating of the customer value proposition. 
     In one embodiment, a universal life insurance product, the first scoring driver, the product value for money, is determined using four metrics. The first and second metrics are based on projections of cash flow for groups of 1,000 policyholders. Each year, the system projects the number of policyholders dying, which is based on mortality tables appropriate for the gender, smoker status, and rating class of the insured, and the number of policyholders surrendering, which is based on lapse assumptions. Cash inflows consist of the premiums paid by survivors, and cash outflows consist of death and surrender benefits paid. The ratio of the present value of cash inflows to the present value of cash outflows is the cash-on-cash Internal Rate of Return (IRR). Two separate IRR calculations are made based on two different assumptions about lapses and surrender rates to provide the first and second metrics that make up the product value for money scoring driver. 
     The first IRR calculation is made based on lapse and surrender rates from the 1995 LIMRA life lapse rate study for the age and policy size of the client, i.e., empirical lapse and surrender rates. The second IRR calculation is made based on level lapse and surrender rates. 
     The third metric that factors into the product value for money scoring driver is the premium required to achieve the illustrated objective, typically the level premium to endow or to mature the policy at age 100. The fourth metric that factors into the product value for money scoring driver is an index of product flexibility. The index of product flexibility consists of one point for each of the following features: no-lapse guarantees, term riders, penalty-free withdrawals, preferred loans, refunds of cost-of-insurance (COI) charges, and persistency bonuses. 
     The next scoring driver, for the embodiment for universal life insurance, product stress tolerance, incorporates three metrics. The first metric is the ratio of the 20-year cash surrender value on mid-point assumptions (halfway between current assumptions and guaranteed assumptions) to the 20-year cash surrender value on current assumptions. Thus, the first metric measures the percentage drop in policy values if interest rates and mortality deteriorate. The second metric used in assessing product stress tolerance is the number of years the policy stays in force at the mid-point assumptions. This second metric measures the adequacy of the planned premium if interest rates and mortality both deteriorate from what was expected. Finally, the system calculates the IRR just as for the product value for money scoring driver, but with premiums cut in half after the third year. This third metric measures the drop in product performance should the policyholder reduce premium payments. 
     In the embodiment for universal life insurance products, Management Performance is measured using the following analytical metrics: (1) Five-year average Return on Equity (ROE); (2) ratio of ordinary life expenses to Generally Recognized Expense Table expenses (GRET); (3) five-year average of annual premium growth rate in excess of annual expense growth rate (PEGG); (4) five-year asset compound annual growth rate; (5) maximum earnings deviation from geometric path; (6) ratio of ordinary life expenses to ordinary life premiums; and (7) ratio of ordinary life expenses to ordinary life reserves. Information to support these metrics may be derived from a carrier&#39;s annual statutory statements, or if the company is a subsidiary of a larger life insurer, data is taken from the consolidated statutory statement for total U.S. operations for the larger insurer.
         (1) The ROE for each year is net income divided by average of beginning and ending capital &amp; surplus for the carrier.   (2) Generally Recognized Expense Tables (GRET) are calculated as follows (based on the 1998 Society of Actuaries factors): $65 per policy for new business, plus $33 per policy already issued, plus $1.25 per unit for new business, plus 72% of new business premiums.   (3) Five-year Average Premium Growth Rate in excess of Expense Growth Rate (PEGG) is the average annual difference between the ordinary life premium growth rate and the ordinary life expense growth rate.   (4) Five-year Assets CAGR is the compound annualized growth rate for the Assets over the last 5 years.   (5) Maximum earnings deviation from geometric path is the maximum absolute difference between the net income in each of the previous 5 years and the theoretical net income, if net income had grown at exactly the 5-year net income CAGR, divided by theoretical net income.   (6) &amp; (7) Ordinary Life Expense is equal to line 22 (General Insurance Expenses), column 3 (Life Insurance) in the Analysis of Operations by Lines of Business. Ordinary Life Premium is the sum of lines 1 &amp; 1A (Premiums and Deposit-type funds), column 3, in the Analysis of Operations by Lines of Business. Reserves are the ordinary life reserves gross of reinsurance (Exhibit 8A) in the annual statement.       

     The fourth scoring driver for the embodiment for universal life insurance products, historical credited rates, is a measure of the composite effects of historical rates. As a measure of the composite effect of historical rates, this scoring driver calculates the value of $1,000 at the beginning of each year accumulated at the historical credited rates for five years. 
     The fifth scoring driver for the embodiment for universal life insurance products, company service quality, is based on appropriate industry-sponsored surveys of carrier practices. One such survey is conducted by the Life Office Management Association (LOMA), an insurance trade association based in Atlanta, Ga. If this survey were to be used as the basis for this scoring driver, four metrics would emerge. The first metric is number of days between application and the offer of insurance. This metric captures one of the most often cited sources of customer satisfaction or dissatisfaction when applying first for a policy. The second metric is telephone service, which is based on a composite score of the following: (1) days per week that customer service is available; (2) average number of calls per customer service representative per day; (3) number of hours a day that customer service is available; and (4) availability of 800 numbers. The third metric is an index of Internet service, consisting of one point for each of the following features: (1) availability of a web page for the carrier; (2) availability of specific product information on the web page; (3) online quotation availability; (4) online application capability; (5) access to customer account information and policy values; (6) capability to change customer information online (address, beneficiary, etc.); and (7) application status tracking capability. The fourth metric is the number of days to complete standard service functions. This fourth metric is the average of the days to complete each of the following: (1) process a cash loan request; (2) process a cash surrender request; (3) pay an uncontested death claim; and (4) reply to customer correspondence. 
     The final scoring driver for the embodiment for universal life insurance products is A.M. Best&#39;s Ratings, which represent the opinion of one rating agency, A. M. Best Company, as to the insurer&#39;s financial strength and ability to meet ongoing obligations to policyholders. 
     The product value rating, the individual driver numeric scores, and the scores for all the metrics are all converted to a “normalized” scale between 0 and 5. The higher the score, the better the product value. The product value rating is the weighted average of the six driver scores. For scoring drivers based on more than one metric, the driver score is the weighted average of the scores for each metric. 
     The weights reflect the relative importance of each of the scoring drivers in evaluating life insurance and annuity products. The weights for each driver, and for each metric within the drivers, are shown in Table A for the embodiment for universal life insurance products. 
     
       
         
               
             
               
               
               
               
             
               
               
               
               
               
             
           
               
                 TABLE A 
               
             
             
               
                   
               
               
                 Weighting Summary 
               
             
          
           
               
                   
                   
                   
                 Driver Metric 
               
               
                   
               
             
          
           
               
                 I. 
                 Product Value for Money 
                   
                 40% 
                   
               
               
                   
                   
                 IRR - current assumptions, LIMRA lapses 
                   
                 32.5%   
               
               
                   
                   
                 IRR - current assumptions, level lapses 
                   
                 32.5%   
               
               
                   
                   
                 Planned Premium to Achieve Objective 
                   
                 25% 
               
               
                   
                   
                 Product Flexibility 
                   
                 10% 
               
               
                   
                   
                   
                   
                 100%  
               
               
                 II. 
                 Product Stress Tolerance 
                   
                 20% 
               
               
                   
                   
                 Ratio of 20-year CSV for midpoint: current 
                   
                 60% 
               
               
                   
                   
                 assumptions 
               
               
                   
                   
                 Years in force at midpoint assumptions 
                   
                 20% 
               
               
                   
                   
                 IRR - current assumptions with 50% premium 
                   
                 20% 
               
               
                   
                   
                 years 4+ 
                   
                   
               
               
                   
                   
                   
                   
                 100%  
               
               
                 III. 
                 Management 
                   
                 20% 
               
               
                   
                 Performance 
                   
               
               
                   
                   
                 5-year Average ROE 
                   
                 40% 
               
               
                   
                   
                 Actual Ordinary Life Expenses/Generally 
                   
                 20% 
               
               
                   
                   
                 Recognized Expense Table 
               
               
                   
                   
                 5-year Average PEGG 
                   
                 10% 
               
               
                   
                   
                 5-year Assets CAGR 
                   
                 10% 
               
               
                   
                   
                 Maximum Earnings Deviation from 
                   
                 10% 
               
               
                   
                   
                 Geometric Path 
               
               
                   
                   
                 Ordinary Life Expenses/Ordinary Life 
                   
                  5% 
               
               
                   
                   
                 Premium 
               
               
                   
                   
                 Ordinary Life Expenses/Ordinary Life 
                   
                  5% 
               
               
                   
                   
                 Reserves 
                   
                   
               
               
                   
                   
                   
                   
                 100%  
               
               
                 IV. 
                 Historical Credited Rates 
                   
                 10% 
               
               
                 V. 
                 Company Service Quality 
                   
                 5% 
               
               
                   
                   
                 Average time to offer 
                   
                 60% 
               
               
                   
                   
                 Telephone service 
                   
                 15% 
               
               
                   
                   
                 Website capabilities 
                   
                 15% 
               
               
                   
                   
                 Response time for standard requests 
                   
                 10% 
               
               
                   
                   
                   
                   
                 100%  
               
               
                 VI. 
                 Best&#39;s Rating 
                   
                 5% 
               
               
                   
                 Total Weight of Drivers: 
                   
                 100% 
               
               
                   
               
             
          
         
       
     
     For each metric within a scoring driver, a high point and a low point are set. If that metric for any product exceeds the high point, that product&#39;s normalized score is set to 5. If the metric is below the low point, the normalized score is set to 0; if it lies between the high and low points, the normalized score is set by linear interpolation. 
     For Best&#39;s ratings, the normalizing methodology is approximated by tabulating 407 companies according to Best&#39;s ratings. A++ rated companies&#39; normalized scores are set to 5. A+ rated companies are in the 88th percentile, so their normalized scores are set at 4.4 (88% of 5). A rated companies are in the 53rd percentile, so their normalized scores are set at 2.6, etc. Companies with a rating below B+ have their normalized scores set to 0. Companies on review for upgrade or downgrade may be adjusted halfway up or down to the next normalized score. 
     Thus, the product value appraisal system  112  simultaneously solicits, prices, and rates, life insurance policy and annuity proposals from insurance carriers. Soliciting, rating and pricing life insurance and annuity policy proposals are conducted in an iterative process. This process is conducted in real-time and preferably continues until optimal product pricing and product ratings have been obtained. 
     The product value appraisal system  112  continues to provide feedback to the insurance carriers, including rating information and whether the carrier&#39;s current bid or proposal meets the customer&#39;s minimum requirements. The insurance carrier can then provide a new bid or proposal, taking into consideration the feedback from the product value appraisal system  112 . If the insurance carrier believes that its proposal is final, e.g., that it cannot submit a more competitive bid, it provides a final bid or proposal to the product value appraisal system  112 . 
     Insurance carriers transmit their final product proposals to the product value appraisal system  112 , as illustrated by step  5  of  FIG. 1 . Proposals received from insurance carriers must meet or exceed minimum product ratings established at the outset by the product value appraisal system  112 . The ratings reflect the product proposal&#39;s total value proposition to the proposed insured. The total value proposition of a life insurance or annuity product proposal takes into account, among others, the proposed insured&#39;s risk profile together with such detailed information as the insurance product proposal, information on the insurer&#39;s financial strength, and information on current market prices. 
     The product value appraisal system  112  transmits or outputs rated product proposals to the distribution channel, as illustrated by step  6  of  FIG. 1 . This output includes an appraisal of the entire value proposition for the proposed insured. The appraisal takes such form as a numerical index, an alphabetic grade, or a descriptive phrase such as “superior,” “above average,” “average,” “below-average,” or “unacceptable.” These results are communicated to the proposed insured by the distribution channel, as illustrated by step  7  of  FIG. 1 . Appropriate explanatory comments may accompany this information. 
     Next, the proposed insured makes a purchase decision and communicates that decision to the distribution channel, as illustrated by step  8  of  FIG. 1 . The proposed insured&#39;s purchase decision flows back to the insurance carriers via the distribution channel and the product value appraisal system, as illustrated by steps  9  and  10  of  FIG. 1 . 
       FIG. 2  illustrates a more detailed view of the parties involved in the valuation system. Insurance carriers  216  (Ins. Co. A, B, C, D, E, F, . . . ) represent competing insurance carriers available to propose insurance products to meet customer requirements according to the present invention. The product value appraisal system  212  for soliciting, pricing, and rating life insurance and annuity product proposals in a real-time, iterative process is shown. The product value appraisal system  212  way also rate the performance of in-force life insurance policies and annuities and measures the value proposition of replacing in-force insurance policies and annuities. Distribution channels  208  include, among others, aggregators, banks, non-bank institutions, bank trusts, insurance agents, brokers, financial planners and advisors, funeral homes, place of employment, affinity groups and other carriers. 
     In addition, another embodiment of the present invention provides a method of valuing in-force life insurance and annuity policies and rates the continuing value proposition to the policyholder. As shown in  FIG. 3 , the product value appraisal system  312  collects, processes and uses available information on the insurance policyholder, the in-force policy, and the insurance company that issued the in-force policy to rate the performance of the in-force policy. 
     Further, if requested by the policyholder, the product value appraisal system  312  determines the value proposition involved in replacing the in-force policy. If a valuation of a replacement policy is requested, the process proceeds in a manner similar to that process described with regard to  FIG. 1 . For example, the product value appraisal system  312  solicits, auctions and rates replacement life insurance and annuity policy proposals to compare their value proposition to that of the in-force policy. Second, the product value appraisal system  312  calculates whether replacing the in-force policy would create value for the policyholder, particularly in view of the existing in-force policy. 
     As shown in  FIG. 4 , it is possible for an entity including a consumer seeking a life insurance or annuity product to invoke the product value appraisal system  412  without the aid of a distribution channel. As shown in step  1  of  FIG. 4 , a party seeking such a product, the proposed insured,  404  contacts the product value appraisal system  412 , typically via a website interface. The proposed insured  404  provides to the product value appraisal system  412  information necessary to request proposals for life insurance or annuity products. This information provided by the proposed insured includes demographic information and information for developing a risk profile of the proposed insured  404  for the product to be evaluated. Demographic and risk profile data may include, for example, the proposed insured&#39;s age, sex, smoking habits amount of insurance desired, the pattern of premium payments and the pattern of disbursements desired from the product. A knowledgeable proposed insured may also provide information about the insurance policy sought, including the proposed premiums to be paid and the proposed benefits to be provided. The proposed insured may also include information as to preferred carriers. 
     Then, the product value appraisal system  412  initiates bidding and/or invites proposals from interested product providers or carriers  416  by sending a proposed opening bid or invitation for proposal to participating insurance carriers  416 , as illustrated by step  2  of  FIG. 4 . The opening bid provided by the product value appraisal system  412  may include an opening price with a minimum product rating. 
     After initiating bidding or inviting proposals, the product appraisal system  412  proceeds in an on-line, real-time, iterative process with the insurance carriers  416 , as illustrated by step  3  of  FIG. 4 . Upon receipt of a bid or proposal from a participating insurance carrier  416 , the product value appraisal system  412  reviews each bid or proposal and rates the bid or proposal and the pricing of each bid or proposal. 
     With each product proposal, the carrier  416  will transmit information about the price and benefits of its product along with identifying information about itself. This data includes data about the product&#39;s proposed benefits and price on both a guaranteed and illustrated basis, and information about the insurance company proposing the product. Product data include the proposed premiums to be paid and the proposed benefits to be provided, both distinguished between guaranteed amounts and illustrated amounts that depend on assumptions about the future. The insurance company information includes data that quantifies the financial strength of the insurance company. The product value appraisal system  412  will use appropriate actuarial assumptions, such as mortality information specific to the end customer&#39;s risk profile, and traditional actuarial present value methodology to determine a numeric rating of the benefits offered in light of the proposed price (Product Value For Money in  FIG. 1 ). Numeric ratings will also be assigned to the product&#39;s performance under less optimistic assumptions about future interest rates and at lower premium levels (Product Stress Tolerance), various company financial information (Management Performance), previous interest rates actually credited to the product&#39;s values (Historical Credited Rates), various qualitative measures of customer service (Customer Service Quality) and to the financial strength of the product provider (e.g., A.M. Best Rating). These ratings will then be weighted to arrive at an overall rating of the customer value proposition. Details of these six scoring drivers and the formulas for the product value appraisal system are as described above for the embodiment for universal life insurance. 
     Thus, the product value appraisal system  412  simultaneously solicits, prices, and rates, life insurance and annuity policy proposals from insurance carriers  416 . Soliciting, rating and pricing these life insurance and annuity policy proposals are conducted in an iterative process. This process is preferably conducted in real-time and continues until optimal product pricing and product ratings have been obtained. Although each insurance carrier can make one proposal at a time, multiple proposals can also be made by each carrier to generate multiple ratings with multiple prices. 
     The product value appraisal system  412  continues to provide feedback to the insurance carriers  416 , including rating information and whether the carrier&#39;s current bid or proposal meets the customer&#39;s minimum requirements. The insurance carrier can then provide a new bid or proposal, taking into consideration the feedback from the product value appraisal system  412 . If the insurance carrier believes that its proposal is final, e.g., that it cannot submit a more competitive bid, it provides a final bid or proposal to the product value appraisal system  412 . 
     Insurance carriers  416  transmit their final product proposals to the product value appraisal system, as illustrated by step  4  of  FIG. 4 . Proposals received from insurance carriers  416  must meet or exceed minimum product ratings established at the outset by the product value appraisal system  412 . The ratings reflect the insurance or annuity product proposal&#39;s total value proposition to the proposed insured  404 . The total value proposition of a life insurance or annuity product proposal takes into account the proposed insured&#39;s risk profile together with detailed information about the life insurance or annuity product proposal, information on the insurer&#39;s financial strength, and information on current market prices. 
     The product value appraisal system  412  transmits rated product proposals to the proposed insured, as illustrated by step  5  of  FIG. 4 . This output includes an appraisal of the entire value proposition for the proposed insured  404 . The appraisal takes such form as a numerical index, an alphabetic grade, or a descriptive phrase such as “superior,” “above average,” “average,” “below-average,” or “unacceptable.” Appropriate explanatory comments may accompany this information. 
     Next, the proposed insured  404  may make a purchase decision and communicate that decision to the product value appraisal system  412 , as illustrated by step  6  of  FIG. 4 . The proposed insured&#39;s purchase decision flows back to the insurance carriers  416  via the product value appraisal system  412 , as illustrated by step  7  of  FIG. 4 . 
       FIG. 5  illustrates an embodiment of the invention appraising the value proposition for replacing an in-force policy. As shown in  FIG. 5 , it is possible for the holder of an existing policy to query the policy appraisal system or product value appraisal system  512  to appraise the value of the in-force policy and also appraise the value proposition for replacing the in-force policy. As shown in  FIG. 5 , step  1 , the policyholder  504  contacts a distribution channel  508  to assist in obtaining such appraisal. The distribution channel then contacts the product value appraisal system  512 , as shown in step  2 . 
     The product value appraisal system  512  then collects, processes and uses available information on the insurance policyholder, the in-force policy, and the insurance company that issued the in-force policy to rate the performance of the in-force policy. The product value appraisal system  512  uses appropriate actuarial assumptions, such as mortality information specific to the end customer&#39;s risk profile, and traditional actuarial present value methodology to determine a numeric rating of the benefits offered in light of the price (Product Value For Money in  FIG. 1 ). Numeric ratings will also be assigned to the product&#39;s performance under less optimistic assumptions about future interest rates and at lower premium levels (Product Stress Tolerance), various company financial information (Management Performance), previous interest rates actually credited to the product&#39;s values (Historical Credited Rates), various qualitative measures of customer service (Customer Service Quality) and to the financial strength of the product provider (e.g., A.M. Best Rating). These ratings will then be weighted to arrive at an overall rating of the customer value proposition. Details of these six scoring drivers and the formulas for the product value appraisal system are as described above for the embodiment for universal life insurance products. Information regarding the rating and value proposition are transmitted to the policyholder  504  via the distribution channel  508 . 
     The product value appraisal system  512  also conducts a similar appraisal for a proposed replacement policy. If requested by the policyholder  504  via the distribution channel or by the distribution channel  508 , the product value appraisal system  512  can solicit life insurance and annuity policy proposals from insurance carriers in the iterative processed described with regard to  FIG. 1 . Similarly, the policyholder  504  may provide information regarding the replacement policy under consideration to the product value appraisal system via the distribution channel  508 , as illustrated by steps  5  and  6 . 
     Although  FIG. 5  illustrates a policyholder invoking the product value appraisal system via a distribution channel, it is possible for the policyholder to contact the product value appraisal system directly to conduct an analysis of an in-force policy and appraisal of the value proposition for replacing the in-force policy. 
     As shown in  FIG. 6 , it is possible for the holder of an existing policy to query the product value appraisal system to value the in-force policy without the aid of a distribution channel. As shown in  FIG. 6 , the policyholder  604  contacts the product value appraisal system  612 , for example, via a website. The product value appraisal system  612  then collects, processes and uses available information on the insurance policyholder, the in-force policy, and the insurance company that issued the in-force policy to rate the performance of the in-force policy. 
     Further, if requested by the policyholder, the product value appraisal system  512  determines the value proposition involved in replacing the in-force policy. If a valuation of a replacement policy is requested, the process proceeds in a manner similar to that process described with regard to  FIG. 4 . For example, the valuation system solicits, auctions and rates replacement insurance policy proposals to compare their value proposition to that of the in-force policy. Second, the invention calculates whether replacing the in-force policy would create value for the policyholder, particularly in view of the existing in-force policy. 
     Revenues for use of the product value appraisal system are generated from subscription fees from life insurance product or annuity providers for participation in the auction process, transaction fees from the providers for the processing of bids and appraising the customer value proposition of proposals submitted, transaction fees from the distribution channel to receive the output from valuation system, and data subscription fees from the product providers to access the market intelligence data that will accumulate over time. Moreover, the valuation system may be provided as value-added services to the distribution channels, or to consumers directly, who pay a fee to use the service. 
     An example of the valuation system of the present invention is provided. John Consumer is reviewing his estate plan with his personal, fee-based financial advisor. The advisor recommends the purchase of an additional $250,000 of life insurance in an irrevocable trust to replace assets transferred to a Charitable Remainder Trust. Because it is not known when Mr. Consumer will die, a permanent (as opposed to term) form of insurance is recommended. Following some discussions of the various forms of permanent coverage, it is agreed to seek the best available life product to fill the need. 
     The financial advisor then goes on-line to the web site which places the financial advisor in contact with the product value appraisal system and commences a search for the best value for his client using the value appraisal system. In this example, the distribution channel is the financial advisor. As the distribution channel, the financial advisor, in response to prompts by the web site interface, enters the following information which is transmitted to the product value appraisal system: (1) risk profile data about John Consumer including, inter alia, his present age (45), sex (male), and smoking status (non-smoker); (2) the purpose of the proposed insurance (asset replacement to preserve his estate); (3) the desired pattern of premium payments (for life); (4) the disbursements desired from the policy (none prior to payment of the death benefit); and (5) face amount and type of product for which proposals are desired ($250,000 of life insurance). 
     The website receives the information and invokes the product value appraisal system, which opens an on-line, real-time proposal solicitation process for interested carriers. These proposals include, inter alia, policy illustrations showing the target premiums, guaranteed and illustrated benefits and cash values at select points in the future, and identifying information about the proposing carrier. Proposals are received from four carriers (A, B, C, and D). The product value appraisal system conducts an overall appraisal of the proposals received. 
     Product Value for Money 
     The cash flow was projected for the group of policyholders, using an industry mortality rate for nonsmokers of this policy size, and lapses (a) according to the LIMRA tables, as shown in Table B and (b) 5%, as shown in Tables C1-C4. 
                                                                 TABLE B                   Product Value for Money       Mortality and LIMRA Lapse rates per 1,000                        Mortality   Lapse           Age   Duration   Rate   Rate                            45   1   0.40   59           46   2   0.59   69           47   3   0.78   51           48   4   0.98   65           49   5   1.24   57           50   6   1.60   29           51   7   2.02   42           52   8   2.49   42           53   9   2.94   42           54   10   3.44   42           55   11   3.85   42           56   12   4.46   42           57   13   5.17   42           58   14   5.63   42           59   15   6.18   42           60   16   7.13   42           61   17   8.07   42           62   18   9.10   42           63   19   10.26   42           64   20   11.35   42           65   21   12.53   42           66   22   13.67   42           67   23   14.81   42           68   24   15.85   42           69   25   16.96   42           70   26   21.03   42           71   27   22.98   42           72   28   25.18   42           73   29   27.60   42           74   30   30.27   42           75   31   33.01   42           76   32   36.25   42           77   33   40.15   42           78   34   44.46   42           79   35   49.29   42           80   36   54.43   42           81   37   59.90   42           82   38   65.32   42           83   39   70.91   42           84   40   77.59   42           85   41   85.53   42           86   42   95.14   42           87   43   105.23   42           88   44   115.29   42           89   45   124.98   42           90   46   134.61   42           91   47   146.21   42           92   48   159.13   42           93   49   175.52   42           94   50   192.61   42           95   51   207.65   42           96   52   219.62   42           97   53   224.00   42           98   54   230.49   42           99   55   238.19   761.81                       Note:           Lapse rate at age 99 is to ensure that all policyholders lapse.            
In each year, the cash flow is:
 
     Premiums for lives in force at the beginning of the year, less 
     Expected deaths in the year multiplied by the Face Amount, less 
     Expected surrenders in the year multiplied by the Cash Surrender Value. 
     Internal rates of return are then calculated. A commercial software product, such as Microsoft Excel, which has an IRR function, may be used for each product based on the cash flows. Using the LIMRA lapse assumptions, for example, Company D the highest IRR at 6.616%, and Company A has the lowest IRR at 5.073%. The high point is set at 6.5% and the low point at 4.5%. Company D, being above the high point, receives a normalized score of 5. Company A, by interpolation, receives a normalized score of 1.4325, rounded to 1.4. A similar process is used for the flat 5% lapse assumption. The IRR calculations for each of the Companies A, B, C, and D are shown in Tables C1-C4. 
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE C1 
               
             
             
               
                   
               
               
                 Product Value for Money - Calculation of IRR - LIMRA Lapses 
               
               
                 Company A 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 2,125 
                 526 
                 0 
                 250,000 
                 2,027.14 
                 5.073% 
               
               
                 46 
                 2 
                 2,125 
                 2,002 
                 0 
                 250,000 
                 1,864.09 
               
               
                 47 
                 3 
                 2,125 
                 3,566 
                 0 
                 250,000 
                 1,693.07 
               
               
                 48 
                 4 
                 2,125 
                 5,223 
                 0 
                 250,000 
                 1,565.67 
               
               
                 49 
                 5 
                 2,125 
                 6,959 
                 567 
                 250,000 
                 1,388.14 
               
               
                 50 
                 6 
                 2,125 
                 8,827 
                 2,751 
                 250,000 
                 1,205.97 
               
               
                 51 
                 7 
                 2,125 
                 10,813 
                 5,064 
                 250,000 
                 1,003.19 
               
               
                 52 
                 8 
                 2,125 
                 12,894 
                 7,483 
                 250,000 
                 812.31 
               
               
                 53 
                 9 
                 2,125 
                 15,098 
                 10,037 
                 250,000 
                 635.74 
               
               
                 54 
                 10 
                 2,125 
                 17,426 
                 12,732 
                 250,000 
                 463.23 
               
               
                 55 
                 11 
                 2,125 
                 19,850 
                 16,396 
                 250,000 
                 291.96 
               
               
                 56 
                 12 
                 2,125 
                 22,296 
                 19,944 
                 250,000 
                 111.58 
               
               
                 57 
                 13 
                 2,125 
                 24,852 
                 23,446 
                 250,000 
                 (65.26) 
               
               
                 58 
                 14 
                 2,125 
                 27,524 
                 26,908 
                 250,000 
                 (193.46) 
               
               
                 59 
                 15 
                 2,125 
                 30,338 
                 30,338 
                 250,000 
                 (319.55) 
               
               
                 60 
                 16 
                 2,125 
                 33,278 
                 33,278 
                 250,000 
                 (469.45) 
               
               
                 61 
                 17 
                 2,125 
                 36,352 
                 36,352 
                 250,000 
                 (603.74) 
               
               
                 62 
                 18 
                 2,125 
                 39,560 
                 39,560 
                 250,000 
                 (734.97) 
               
               
                 63 
                 19 
                 2,125 
                 42,908 
                 42,908 
                 250,000 
                 (865.03) 
               
               
                 64 
                 20 
                 2,125 
                 46,398 
                 46,398 
                 250,000 
                 (974.62) 
               
               
                 65 
                 21 
                 2,125 
                 50,054 
                 50,054 
                 250,000 
                 (1,079.20) 
               
               
                 66 
                 22 
                 2,125 
                 53,858 
                 53,858 
                 250,000 
                 (1,167.40) 
               
               
                 67 
                 23 
                 2,125 
                 57,809 
                 57,809 
                 250,000 
                 (1,243.07) 
               
               
                 68 
                 24 
                 2,125 
                 61,906 
                 61,906 
                 250,000 
                 (1,299.40) 
               
               
                 69 
                 25 
                 2,125 
                 66,140 
                 66,140 
                 250,000 
                 (1,350.62) 
               
               
                 70 
                 26 
                 2,125 
                 70,502 
                 70,502 
                 250,000 
                 (1,582.22) 
               
               
                 71 
                 27 
                 2,125 
                 74,977 
                 74,977 
                 250,000 
                 (1,647.34) 
               
               
                 72 
                 28 
                 2,125 
                 79,545 
                 79,545 
                 250,000 
                 (1,708.99) 
               
               
                 73 
                 29 
                 2,125 
                 84,179 
                 84,179 
                 250,000 
                 (1,763.59) 
               
               
                 74 
                 30 
                 2,125 
                 88,573 
                 88,573 
                 250,000 
                 (1,808.46) 
               
               
                 75 
                 31 
                 2,125 
                 93,055 
                 93,055 
                 250,000 
                 (1,837.56) 
               
               
                 76 
                 32 
                 2,125 
                 97,548 
                 97,548 
                 250,000 
                 (1,868.36) 
               
               
                 77 
                 33 
                 2,125 
                 102,043 
                 102,043 
                 250,000 
                 (1,902.89) 
               
               
                 78 
                 34 
                 2,125 
                 106,540 
                 16,540 
                 250,000 
                 (1,384.83) 
               
               
                 79 
                 35 
                 2,125 
                 111,037 
                 111,037 
                 250,000 
                 (1,942.39) 
               
               
                 80 
                 36 
                 2,125 
                 115,538 
                 115,538 
                 250,000 
                 (1,939.12) 
               
               
                 81 
                 37 
                 2,125 
                 120,047 
                 120,047 
                 250,000 
                 (1,918.18) 
               
               
                 82 
                 38 
                 2,125 
                 124,572 
                 124,572 
                 250,000 
                 (1,870.75) 
               
               
                 83 
                 39 
                 2,125 
                 129,126 
                 129,126 
                 250,000 
                 (1,805.84) 
               
               
                 84 
                 40 
                 2,125 
                 133,719 
                 133,719 
                 250,000 
                 (1,742.95) 
               
               
                 85 
                 41 
                 2,125 
                 138,369 
                 138,369 
                 250,000 
                 (1,679.76) 
               
               
                 86 
                 42 
                 2,125 
                 143,094 
                 143,094 
                 250,000 
                 (1,616.67) 
               
               
                 87 
                 43 
                 2,125 
                 147,917 
                 147,917 
                 250,000 
                 (1,531.49) 
               
               
                 88 
                 44 
                 2,125 
                 152,871 
                 152,871 
                 250,000 
                 (1,422.26) 
               
               
                 89 
                 45 
                 2,125 
                 158,001 
                 158,001 
                 250,000 
                 (1,293.41) 
               
               
                 90 
                 46 
                 2,125 
                 163,372 
                 163,372 
                 250,000 
                 (1,156.21) 
               
               
                 91 
                 47 
                 2,125 
                 169,070 
                 169,070 
                 250,000 
                 (1,029.28) 
               
               
                 92 
                 48 
                 2,125 
                 175,208 
                 175,208 
                 250,000 
                 (905.19) 
               
               
                 93 
                 49 
                 2,125 
                 181,934 
                 181,934 
                 250,000 
                 (792.92) 
               
               
                 94 
                 50 
                 2,125 
                 188,913 
                 188,913 
                 250,000 
                 (677.31) 
               
               
                 95 
                 51 
                 2,125 
                 197,239 
                 197,239 
                 250,000 
                 (557.51) 
               
               
                 96 
                 52 
                 2,125 
                 207,171 
                 207,171 
                 250,000 
                 (442.56) 
               
               
                 97 
                 53 
                 2,125 
                 219,020 
                 219,020 
                 250,000 
                 (335.01) 
               
               
                 98 
                 54 
                 2,125 
                 233,154 
                 233,154 
                 250,000 
                 (254.31) 
               
               
                 99 
                 55 
                 2,125 
                 250,016 
                 250,016 
                 250,016 
                 (595.21) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE C2 
               
             
             
               
                   
               
               
                 Product Value for Money - Calculation of IRR - LIMRA Lapses 
               
               
                 Company B 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 1,953 
                 909 
                 0 
                 250,000 
                 1,855.14 
                 6.185% 
               
               
                 46 
                 2 
                 1,953 
                 2,409 
                 0 
                 250,000 
                 1,702.31 
               
               
                 47 
                 3 
                 1,953 
                 3,972 
                 0 
                 250,000 
                 1,542.54 
               
               
                 48 
                 4 
                 1,953 
                 5,638 
                 663 
                 250,000 
                 1,387.20 
               
               
                 49 
                 5 
                 1,953 
                 7,434 
                 2,911 
                 250,000 
                 1,151.34 
               
               
                 50 
                 6 
                 1,953 
                 9,465 
                 5,394 
                 250,000 
                 1,024.52 
               
               
                 51 
                 7 
                 1,953 
                 11,611 
                 7,992 
                 250,000 
                 794.56 
               
               
                 52 
                 8 
                 1,953 
                 13,879 
                 10,713 
                 250,000 
                 604.31 
               
               
                 53 
                 9 
                 1,953 
                 16,275 
                 13,561 
                 250,000 
                 429.05 
               
               
                 54 
                 10 
                 1,953 
                 18,803 
                 16,541 
                 250,000 
                 258.47 
               
               
                 55 
                 11 
                 1,953 
                 21,446 
                 19,637 
                 250,000 
                 110.56 
               
               
                 56 
                 12 
                 1,953 
                 24,203 
                 22,847 
                 250,000 
                 (53.52) 
               
               
                 57 
                 13 
                 1,953 
                 27,068 
                 26,164 
                 250,000 
                 (218.51) 
               
               
                 58 
                 14 
                 1,953 
                 30,045 
                 29,593 
                 250,000 
                 (338.77) 
               
               
                 59 
                 15 
                 1,953 
                 33,139 
                 33,139 
                 250,000 
                 (460.29) 
               
               
                 60 
                 16 
                 1,953 
                 36,357 
                 36,537 
                 250,000 
                 (612.25) 
               
               
                 61 
                 17 
                 1,953 
                 39,699 
                 39,699 
                 250,000 
                 (741.12) 
               
               
                 62 
                 18 
                 1,953 
                 43,164 
                 43,164 
                 250,000 
                 (869.93) 
               
               
                 63 
                 19 
                 1,953 
                 46,756 
                 46,756 
                 250,000 
                 (997.11) 
               
               
                 64 
                 20 
                 1,953 
                 50,474 
                 50,474 
                 250,000 
                 (1,103.34) 
               
               
                 65 
                 21 
                 1,953 
                 54,284 
                 54,284 
                 250,000 
                 (1,203.31) 
               
               
                 66 
                 22 
                 1,953 
                 58,225 
                 58,225 
                 250,000 
                 (1,286.63) 
               
               
                 67 
                 23 
                 1,953 
                 62,293 
                 62,293 
                 250,000 
                 (1,357.18) 
               
               
                 68 
                 24 
                 1,953 
                 66,487 
                 66,487 
                 250,000 
                 (1,408.21) 
               
               
                 69 
                 25 
                 1,953 
                 70,804 
                 70,804 
                 250,000 
                 (1,454.08) 
               
               
                 70 
                 26 
                 1,953 
                 75,241 
                 75,241 
                 250,000 
                 (1,680.31) 
               
               
                 71 
                 27 
                 1,953 
                 79,781 
                 79,781 
                 250,000 
                 (1,739.86) 
               
               
                 72 
                 28 
                 1,953 
                 84,421 
                 84,421 
                 250,000 
                 (1,796.15) 
               
               
                 73 
                 29 
                 1,953 
                 89,158 
                 89,158 
                 250,000 
                 (1,845.76) 
               
               
                 74 
                 30 
                 1,953 
                 93,985 
                 93,985 
                 250,000 
                 (1,888.48) 
               
               
                 75 
                 31 
                 1,953 
                 98,880 
                 98,880 
                 250,000 
                 (1,914.94) 
               
               
                 76 
                 32 
                 1,953 
                 103,828 
                 103,828 
                 250,000 
                 (1,943.12) 
               
               
                 77 
                 33 
                 1,953 
                 108,814 
                 108,814 
                 250,000 
                 (1,974.94) 
               
               
                 78 
                 34 
                 1,953 
                 113,823 
                 113,823 
                 250,000 
                 (1,996.37) 
               
               
                 79 
                 35 
                 1,953 
                 118,843 
                 118,843 
                 250,000 
                 (2,008.32) 
               
               
                 80 
                 36 
                 1,953 
                 123,863 
                 123,863 
                 250,000 
                 (2,001.52) 
               
               
                 81 
                 37 
                 1,953 
                 128,878 
                 128,878 
                 250,000 
                 (1,976.72) 
               
               
                 82 
                 38 
                 1,953 
                 133,890 
                 133,890 
                 250,000 
                 (1,925.18) 
               
               
                 83 
                 39 
                 1,953 
                 138,900 
                 138,900 
                 250,000 
                 (1,855.96) 
               
               
                 84 
                 40 
                 1,953 
                 143,895 
                 143,895 
                 250,000 
                 (1,788.58) 
               
               
                 85 
                 41 
                 1,953 
                 148,866 
                 148,866 
                 250,000 
                 (1,720.70) 
               
               
                 86 
                 42 
                 1,953 
                 153,818 
                 153,818 
                 250,000 
                 (1,652.81) 
               
               
                 87 
                 43 
                 1,953 
                 158,755 
                 158,755 
                 250,000 
                 (1,562.79) 
               
               
                 88 
                 44 
                 1,953 
                 163,689 
                 163,689 
                 250,000 
                 (1,448.82) 
               
               
                 89 
                 45 
                 1,953 
                 168,654 
                 168,654 
                 250,000 
                 (1,315.47) 
               
               
                 90 
                 46 
                 1,953 
                 173,705 
                 173,705 
                 250,000 
                 (1,174.12) 
               
               
                 91 
                 47 
                 1,953 
                 178,990 
                 178,990 
                 250,000 
                 (1,043.56) 
               
               
                 92 
                 48 
                 1,953 
                 184,626 
                 184,626 
                 250,000 
                 (916.32) 
               
               
                 93 
                 49 
                 1,953 
                 190,769 
                 190,769 
                 250,000 
                 (801.38) 
               
               
                 94 
                 50 
                 1,953 
                 197,629 
                 197,629 
                 250,000 
                 (683.83) 
               
               
                 95 
                 51 
                 1,953 
                 204,973 
                 204,973 
                 250,000 
                 (562.11) 
               
               
                 96 
                 52 
                 1,953 
                 213,158 
                 213,158 
                 250,000 
                 (445.51) 
               
               
                 97 
                 53 
                 1,953 
                 222,747 
                 222,747 
                 250,000 
                 (336.72) 
               
               
                 98 
                 54 
                 1,953 
                 234,628 
                 234,628 
                 250,000 
                 (255.23) 
               
               
                 99 
                 55 
                 1,953 
                 250,248 
                 250,248 
                 250,048 
                 (596.19) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE C3 
               
             
             
               
                   
               
               
                 Product Value for Money - Calculation of IRR - LIMRA Lapses 
               
               
                 Company C 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 2,048 
                 1,044 
                 0 
                 250,000 
                 1,950.14 
                 5.182% 
               
               
                 46 
                 2 
                 2,048 
                 2,589 
                 0 
                 250,000 
                 1,791.66 
               
               
                 47 
                 3 
                 2,048 
                 4,174 
                 0 
                 250,000 
                 1,625.68 
               
               
                 48 
                 4 
                 2,048 
                 5,823 
                 0 
                 250,000 
                 1,501.78 
               
               
                 49 
                 5 
                 2,048 
                 7,551 
                 1,227 
                 250,000 
                 1,299.32 
               
               
                 50 
                 6 
                 2,048 
                 9,369 
                 3,045 
                 250,000 
                 1,143.55 
               
               
                 51 
                 7 
                 2,048 
                 11,288 
                 4,963 
                 250,000 
                 951.70 
               
               
                 52 
                 8 
                 2,048 
                 13,313 
                 6,988 
                 250,000 
                 774.27 
               
               
                 53 
                 9 
                 2,048 
                 15,446 
                 9,122 
                 250,000 
                 610.78 
               
               
                 54 
                 10 
                 2,048 
                 17,688 
                 11,364 
                 250,000 
                 451.10 
               
               
                 55 
                 11 
                 2,048 
                 20,031 
                 14,339 
                 250,000 
                 297.40 
               
               
                 56 
                 12 
                 2,048 
                 22,451 
                 17,391 
                 250,000 
                 128.44 
               
               
                 57 
                 13 
                 2,048 
                 24,934 
                 20,507 
                 250,000 
                 (40.53) 
               
               
                 58 
                 14 
                 2,048 
                 27,484 
                 23,689 
                 250,000 
                 (163.93) 
               
               
                 59 
                 15 
                 2,048 
                 30,102 
                 26,939 
                 250,000 
                 (287.78) 
               
               
                 60 
                 16 
                 2,048 
                 32,752 
                 30,222 
                 250,000 
                 (445.88) 
               
               
                 61 
                 17 
                 2,048 
                 35,494 
                 33,596 
                 250,000 
                 (586.89) 
               
               
                 62 
                 18 
                 2,048 
                 38,330 
                 37,065 
                 250,000 
                 (723.54) 
               
               
                 63 
                 19 
                 2,048 
                 41,265 
                 40,633 
                 250,000 
                 (857.86) 
               
               
                 64 
                 20 
                 2,048 
                 44,303 
                 44,303 
                 250,000 
                 (970.67) 
               
               
                 65 
                 21 
                 2,048 
                 47,421 
                 47,421 
                 250,000 
                 (1,067.49) 
               
               
                 66 
                 22 
                 2,048 
                 50,616 
                 50,616 
                 250,000 
                 (1,147.79) 
               
               
                 67 
                 23 
                 2,048 
                 53,904 
                 53,904 
                 250,000 
                 (1,215.79) 
               
               
                 68 
                 24 
                 2,048 
                 57,293 
                 57,293 
                 250,000 
                 (1,264.85) 
               
               
                 69 
                 25 
                 2,048 
                 60,782 
                 60,782 
                 250,000 
                 (1,309.34) 
               
               
                 70 
                 26 
                 2,048 
                 64,369 
                 64,369 
                 250,000 
                 (1,534.93) 
               
               
                 71 
                 27 
                 2,048 
                 68,055 
                 68,055 
                 250,000 
                 (1,594.93) 
               
               
                 72 
                 28 
                 2,048 
                 71,843 
                 71,843 
                 250,000 
                 (1,652.53) 
               
               
                 73 
                 29 
                 2,048 
                 75,734 
                 75,734 
                 250,000 
                 (1,704.32) 
               
               
                 74 
                 30 
                 2,048 
                 79,724 
                 79,724 
                 250,000 
                 (1,750.03) 
               
               
                 75 
                 31 
                 2,048 
                 83,809 
                 83,809 
                 250,000 
                 (1,780.38) 
               
               
                 76 
                 32 
                 2,048 
                 87,983 
                 87,983 
                 250,000 
                 (1,813.30) 
               
               
                 77 
                 33 
                 2,048 
                 92,240 
                 92,240 
                 250,000 
                 (1,850.69) 
               
               
                 78 
                 34 
                 2,048 
                 96,575 
                 96,575 
                 250,000 
                 (1,878.47) 
               
               
                 79 
                 35 
                 2,048 
                 100,987 
                 100,987 
                 250,000 
                 (1,897.52) 
               
               
                 80 
                 36 
                 2,048 
                 105,476 
                 105,476 
                 250,000 
                 (1,898.42) 
               
               
                 81 
                 37 
                 2,048 
                 110,047 
                 110,047 
                 250,000 
                 (1,881.81) 
               
               
                 82 
                 38 
                 2,048 
                 114,711 
                 114,711 
                 250,000 
                 (1,838.75) 
               
               
                 83 
                 39 
                 2,048 
                 119,482 
                 119,482 
                 250,000 
                 (1,778.16) 
               
               
                 84 
                 40 
                 2,048 
                 124,363 
                 124,363 
                 250,000 
                 (1,719.41) 
               
               
                 85 
                 41 
                 2,048 
                 129,360 
                 129,360 
                 250,000 
                 (1,660.10) 
               
               
                 86 
                 42 
                 2,048 
                 134,488 
                 134,488 
                 250,000 
                 (1,600.60) 
               
               
                 87 
                 43 
                 2,048 
                 139,768 
                 139,768 
                 250,000 
                 (1,518.66) 
               
               
                 88 
                 44 
                 2,048 
                 145,231 
                 145,231 
                 250,000 
                 (1,412.29) 
               
               
                 89 
                 45 
                 2,048 
                 150,929 
                 150,929 
                 250,000 
                 (1,285.90) 
               
               
                 90 
                 46 
                 2,048 
                 156,935 
                 156,935 
                 250,000 
                 (1,150.76) 
               
               
                 91 
                 47 
                 2,048 
                 163,342 
                 163,342 
                 250,000 
                 (1,025.55) 
               
               
                 92 
                 48 
                 2,048 
                 170,263 
                 170,263 
                 250,000 
                 (902.82) 
               
               
                 93 
                 49 
                 2,048 
                 177,843 
                 177,843 
                 250,000 
                 (791.59) 
               
               
                 94 
                 50 
                 2,048 
                 186,264 
                 186,264 
                 250,000 
                 (677.00) 
               
               
                 95 
                 51 
                 2,048 
                 195,758 
                 195,758 
                 250,000 
                 (557.72) 
               
               
                 96 
                 52 
                 2,048 
                 206,617 
                 206,617 
                 250,000 
                 (442.98) 
               
               
                 97 
                 53 
                 2,048 
                 219,221 
                 219,221 
                 250,000 
                 (335.47) 
               
               
                 98 
                 54 
                 2,048 
                 234,056 
                 234,056 
                 250,000 
                 (254.76) 
               
               
                 99 
                 55 
                 2,048 
                 251,745 
                 251,745 
                 251,745 
                 (599.60) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE C4 
               
             
             
               
                   
               
               
                 Product Value for Money - Calculation of IRR - LIMRA Lapses 
               
               
                 Company D 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 1,648 
                 1,387 
                 — 
                 250,000 
                 1,550.14 
                 6.616% 
               
               
                 46 
                 2 
                 1,648 
                 2,800 
                 — 
                 250,000 
                 1,415.43 
               
               
                 47 
                 3 
                 1,648 
                 4,242 
                 — 
                 250,000 
                 1,275.62 
               
               
                 48 
                 4 
                 1,648 
                 5,717 
                 — 
                 250,000 
                 1,169.85 
               
               
                 49 
                 5 
                 1,648 
                 7,255 
                 523 
                 250,000 
                 1,020.37 
               
               
                 50 
                 6 
                 1,648 
                 8,833 
                 2,435 
                 250,000 
                 864.48 
               
               
                 51 
                 7 
                 1,648 
                 10,482 
                 4,430 
                 250,000 
                 684.49 
               
               
                 52 
                 8 
                 1,648 
                 12,180 
                 6,487 
                 250,000 
                 517.91 
               
               
                 53 
                 9 
                 1,648 
                 13,929 
                 8,609 
                 250,000 
                 366.15 
               
               
                 54 
                 10 
                 1,648 
                 15,705 
                 10,772 
                 250,000 
                 219.51 
               
               
                 55 
                 11 
                 1,648 
                 17,453 
                 12,923 
                 250,000 
                 96.68 
               
               
                 56 
                 12 
                 1,648 
                 19,174 
                 15,062 
                 250,000 
                 (41.58) 
               
               
                 57 
                 13 
                 1,648 
                 21,011 
                 17,333 
                 250,000 
                 (183.69) 
               
               
                 58 
                 14 
                 1,648 
                 22,969 
                 19,744 
                 250,000 
                 (283.86) 
               
               
                 59 
                 15 
                 1,648 
                 25,058 
                 22,308 
                 250,000 
                 (388.04) 
               
               
                 60 
                 16 
                 1,648 
                 27,287 
                 25,032 
                 250,000 
                 (530.53) 
               
               
                 61 
                 17 
                 1,648 
                 29,664 
                 27,932 
                 250,000 
                 (658.69) 
               
               
                 62 
                 18 
                 1,648 
                 32,200 
                 31,012 
                 250,000 
                 (785.00) 
               
               
                 63 
                 19 
                 1,648 
                 34,905 
                 34,295 
                 250,000 
                 (911.51) 
               
               
                 64 
                 20 
                 1,648 
                 37,790 
                 37,790 
                 250,000 
                 (1,018.82) 
               
               
                 65 
                 21 
                 1,648 
                 40,816 
                 40,816 
                 250,000 
                 (1,111.76) 
               
               
                 66 
                 22 
                 1,648 
                 43,943 
                 43,943 
                 250,000 
                 (1,188.75) 
               
               
                 67 
                 23 
                 1,648 
                 47,230 
                 47,230 
                 250,000 
                 (1,254.51) 
               
               
                 68 
                 24 
                 1,648 
                 50,616 
                 50,616 
                 250,000 
                 (1,301.37) 
               
               
                 69 
                 25 
                 1,648 
                 54,111 
                 54,111 
                 250,000 
                 (1,343.86) 
               
               
                 70 
                 26 
                 1,648 
                 57,657 
                 57,657 
                 250,000 
                 (1,567.12) 
               
               
                 71 
                 27 
                 1,648 
                 61,286 
                 61,286 
                 250,000 
                 (1,624.57) 
               
               
                 72 
                 28 
                 1,648 
                 65,034 
                 65,034 
                 250,000 
                 (1,679.92) 
               
               
                 73 
                 29 
                 1,648 
                 68,893 
                 68,893 
                 250,000 
                 (1,729.66) 
               
               
                 74 
                 30 
                 1,648 
                 72,878 
                 72,878 
                 250,000 
                 (1,773.65) 
               
               
                 75 
                 31 
                 1,648 
                 76,961 
                 76,961 
                 250,000 
                 (1,802.34) 
               
               
                 76 
                 32 
                 1,648 
                 81,159 
                 81,159 
                 250,000 
                 (1,833.87) 
               
               
                 77 
                 33 
                 1,648 
                 85,490 
                 85,490 
                 250,000 
                 (1,870.23) 
               
               
                 78 
                 34 
                 1,648 
                 89,913 
                 89,913 
                 250,000 
                 (1,897.03) 
               
               
                 79 
                 35 
                 1,648 
                 94,450 
                 94,450 
                 250,000 
                 (1,915.25) 
               
               
                 80 
                 36 
                 1,648 
                 99,103 
                 99,103 
                 250,000 
                 (1,915.43) 
               
               
                 81 
                 37 
                 1,648 
                 103,843 
                 103,843 
                 250,000 
                 (1,898.02) 
               
               
                 82 
                 38 
                 1,648 
                 108,731 
                 108,731 
                 250,000 
                 (1,854.28) 
               
               
                 83 
                 39 
                 1,648 
                 113,745 
                 113,745 
                 250,000 
                 (1,792.95) 
               
               
                 84 
                 40 
                 1,648 
                 118,901 
                 118,901 
                 250,000 
                 (1,733.46) 
               
               
                 85 
                 41 
                 1,648 
                 124,220 
                 124,220 
                 250,000 
                 (1,673.43) 
               
               
                 86 
                 42 
                 1,648 
                 129,756 
                 129,756 
                 250,000 
                 (1,613.27) 
               
               
                 87 
                 43 
                 1,648 
                 135,527 
                 135,527 
                 250,000 
                 (1,530.66) 
               
               
                 88 
                 44 
                 1,648 
                 141,585 
                 141,585 
                 250,000 
                 (1,423.60) 
               
               
                 89 
                 45 
                 1,648 
                 147,976 
                 147,976 
                 250,000 
                 (1,296.48) 
               
               
                 90 
                 46 
                 1,648 
                 154,755 
                 154,755 
                 250,000 
                 (1,160.54) 
               
               
                 91 
                 47 
                 1,648 
                 161,991 
                 161,991 
                 250,000 
                 (1,034.44) 
               
               
                 92 
                 48 
                 1,648 
                 169,755 
                 169,755 
                 250,000 
                 (910.71) 
               
               
                 93 
                 49 
                 1,648 
                 178,135 
                 178,135 
                 250,000 
                 (798.41) 
               
               
                 94 
                 50 
                 1,648 
                 187,254 
                 187,254 
                 250,000 
                 (682.68) 
               
               
                 95 
                 51 
                 1,648 
                 197,236 
                 197,236 
                 250,000 
                 (562.25) 
               
               
                 96 
                 52 
                 1,648 
                 208,253 
                 208,253 
                 250,000 
                 (446.42) 
               
               
                 97 
                 53 
                 1,648 
                 220,519 
                 220,519 
                 250,000 
                 (337.94) 
               
               
                 98 
                 54 
                 1,648 
                 234,314 
                 234,314 
                 250,000 
                 (256.41) 
               
               
                 99 
                 55 
                 1,648 
                 250,002 
                 250,002 
                 250,002 
                 (596.58) 
               
               
                   
               
             
          
         
       
     
     Calculation of IRR based on a level lapse rate are shown in Tables D1-D4. 
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE D1 
               
             
             
               
                   
               
               
                 Product Value for Money - Calculation of IRR - Level Lapses 
               
               
                 Company A 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 2,125 
                 526 
                 0 
                 250,000 
                 2,026.69 
                 4.806% 
               
               
                 46 
                 2 
                 2,125 
                 2,002 
                 0 
                 250,000 
                 1,880.59 
               
               
                 47 
                 3 
                 2,125 
                 3,566 
                 0 
                 250,000 
                 1,744.08 
               
               
                 48 
                 4 
                 2,125 
                 5,223 
                 0 
                 250,000 
                 1,613.06 
               
               
                 49 
                 5 
                 2,125 
                 6,959 
                 567 
                 250,000 
                 1,456.88 
               
               
                 50 
                 6 
                 2,125 
                 8,827 
                 2,751 
                 250,000 
                 1,231.80 
               
               
                 51 
                 7 
                 2,125 
                 10,813 
                 5,064 
                 250,000 
                 1,007.95 
               
               
                 52 
                 8 
                 2,125 
                 12,894 
                 7,483 
                 250,000 
                 792.20 
               
               
                 53 
                 9 
                 2,125 
                 15,098 
                 10,037 
                 250,000 
                 594.93 
               
               
                 54 
                 10 
                 2,125 
                 17,426 
                 12,732 
                 250,000 
                 405.41 
               
               
                 55 
                 1 
                 2,125 
                 19,850 
                 16,396 
                 250,000 
                 216.78 
               
               
                 56 
                 12 
                 2,125 
                 22,296 
                 19,944 
                 250,000 
                 24.34 
               
               
                 57 
                 13 
                 2,125 
                 24,852 
                 23,446 
                 250,000 
                 (159.84) 
               
               
                 58 
                 14 
                 2,125 
                 27,524 
                 26,908 
                 250,000 
                 (292.34) 
               
               
                 59 
                 15 
                 2,125 
                 30,338 
                 30,338 
                 250,000 
                 (419.27) 
               
               
                 60 
                 16 
                 2,125 
                 33,278 
                 33,278 
                 250,000 
                 (563.88) 
               
               
                 61 
                 17 
                 2,125 
                 36,352 
                 36,352 
                 250,000 
                 (690.84) 
               
               
                 62 
                 18 
                 2,125 
                 39,560 
                 39,560 
                 250,000 
                 (812.29) 
               
               
                 63 
                 19 
                 2,125 
                 42,908 
                 42,908 
                 250,000 
                 (930.11) 
               
               
                 64 
                 20 
                 2,125 
                 46,398 
                 46,398 
                 250,000 
                 (1,026.55) 
               
               
                 65 
                 21 
                 2,125 
                 50,054 
                 50,054 
                 250,000 
                 (1,116.30) 
               
               
                 66 
                 22 
                 2,125 
                 53,858 
                 53,858 
                 250,000 
                 (1,189.14) 
               
               
                 67 
                 23 
                 2,125 
                 57,809 
                 57,809 
                 250,000 
                 (1,248.93) 
               
               
                 68 
                 24 
                 2,125 
                 61,906 
                 61,906 
                 250,000 
                 (1,289.93) 
               
               
                 69 
                 25 
                 2,125 
                 66,140 
                 66,140 
                 250,000 
                 (1,325.16) 
               
               
                 70 
                 26 
                 2,125 
                 70,502 
                 70,502 
                 250,000 
                 (1,517.01) 
               
               
                 71 
                 27 
                 2,125 
                 74,977 
                 74,977 
                 250,000 
                 (1,560.13) 
               
               
                 72 
                 28 
                 2,125 
                 79,545 
                 79,545 
                 250,000 
                 (1,598.79) 
               
               
                 73 
                 29 
                 2,125 
                 84,179 
                 84,179 
                 250,000 
                 (1,629.99) 
               
               
                 74 
                 30 
                 2,125 
                 88,573 
                 88,573 
                 250,000 
                 (1,651.26) 
               
               
                 75 
                 31 
                 2,125 
                 93,055 
                 93,055 
                 250,000 
                 (1,658.30) 
               
               
                 76 
                 32 
                 2,125 
                 97,548 
                 97,548 
                 250,000 
                 (1,665.94) 
               
               
                 77 
                 33 
                 2,125 
                 102,043 
                 102,043 
                 250,000 
                 (1,675.80) 
               
               
                 78 
                 34 
                 2,125 
                 106,540 
                 16,540 
                 250,000 
                 (1,146.61) 
               
               
                 79 
                 35 
                 2,125 
                 111,037 
                 111,037 
                 250,000 
                 (1,669.07) 
               
               
                 80 
                 36 
                 2,125 
                 115,538 
                 115,538 
                 250,000 
                 (1,646.39) 
               
               
                 81 
                 37 
                 2,125 
                 120,047 
                 120,047 
                 250,000 
                 (1,609.52) 
               
               
                 82 
                 38 
                 2,125 
                 124,572 
                 124,572 
                 250,000 
                 (1,551.99) 
               
               
                 83 
                 39 
                 2,125 
                 129,126 
                 129,126 
                 250,000 
                 (1,481.50) 
               
               
                 84 
                 40 
                 2,125 
                 133,719 
                 133,719 
                 250,000 
                 (1,413.59) 
               
               
                 85 
                 41 
                 2,125 
                 138,369 
                 138,369 
                 250,000 
                 (1,346.42) 
               
               
                 86 
                 42 
                 2,125 
                 143,094 
                 143,094 
                 250,000 
                 (1,280.33) 
               
               
                 87 
                 43 
                 2,125 
                 147,917 
                 147,917 
                 250,000 
                 (1,198.61) 
               
               
                 88 
                 44 
                 2,125 
                 152,871 
                 152,871 
                 250,000 
                 (1,100.39) 
               
               
                 89 
                 45 
                 2,125 
                 158,001 
                 158,001 
                 250,000 
                 (989.56) 
               
               
                 90 
                 46 
                 2,125 
                 163,372 
                 163,372 
                 250,000 
                 (874.88) 
               
               
                 91 
                 47 
                 2,125 
                 169,070 
                 169,070 
                 250,000 
                 (770.06) 
               
               
                 92 
                 48 
                 2,125 
                 175,208 
                 175,208 
                 250,000 
                 (669.52) 
               
               
                 93 
                 49 
                 2,125 
                 181,934 
                 181,934 
                 250,000 
                 (579.56) 
               
               
                 94 
                 50 
                 2,125 
                 188,913 
                 188,913 
                 250,000 
                 (489.22) 
               
               
                 95 
                 51 
                 2,125 
                 197,239 
                 197,239 
                 250,000 
                 (398.10) 
               
               
                 96 
                 52 
                 2,125 
                 207,171 
                 207,171 
                 250,000 
                 (312.54) 
               
               
                 97 
                 53 
                 2,125 
                 219,020 
                 219,020 
                 250,000 
                 (234.19) 
               
               
                 98 
                 54 
                 2,125 
                 233,154 
                 233,154 
                 250,000 
                 (175.96) 
               
               
                 99 
                 55 
                 2,125 
                 250,016 
                 250,016 
                 250,016 
                 (398.31) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE D2 
               
             
             
               
                   
               
               
                 Product Value for Money - Calculation of IRR - Level Lapses 
               
               
                 Company B 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 1,953 
                 909 
                 0 
                 250,000 
                 1,854.69 
                 6.034% 
               
               
                 46 
                 2 
                 1,953 
                 2,409 
                 0 
                 250,000 
                 1,717.26 
               
               
                 47 
                 3 
                 1,953 
                 3,972 
                 0 
                 250,000 
                 1,589.02 
               
               
                 48 
                 4 
                 1,953 
                 5,638 
                 663 
                 250,000 
                 1,437.51 
               
               
                 49 
                 5 
                 1,953 
                 7,434 
                 2,911 
                 250,000 
                 1,222.06 
               
               
                 50 
                 6 
                 1,953 
                 9,465 
                 5,394 
                 250,000 
                 997.53 
               
               
                 51 
                 7 
                 1,953 
                 11,611 
                 7,992 
                 250,000 
                 775.38 
               
               
                 52 
                 8 
                 1,953 
                 13,879 
                 10,713 
                 250,000 
                 561.31 
               
               
                 53 
                 9 
                 1,953 
                 16,275 
                 13,561 
                 250,000 
                 366.54 
               
               
                 54 
                 10 
                 1,953 
                 18,803 
                 16,541 
                 250,000 
                 180.30 
               
               
                 55 
                 11 
                 1,953 
                 21,446 
                 19,637 
                 250,000 
                 20.41 
               
               
                 56 
                 12 
                 1,953 
                 24,203 
                 22,847 
                 250,000 
                 (152.05) 
               
               
                 57 
                 13 
                 1,953 
                 27,068 
                 26,164 
                 250,000 
                 (321.74) 
               
               
                 58 
                 14 
                 1,953 
                 30,045 
                 29,593 
                 250,000 
                 (444.47) 
               
               
                 59 
                 15 
                 1,953 
                 33,139 
                 33,139 
                 250,000 
                 (565.64) 
               
               
                 60 
                 16 
                 1,953 
                 36,357 
                 36,537 
                 250,000 
                 (712.11) 
               
               
                 61 
                 17 
                 1,953 
                 39,699 
                 39,699 
                 250,000 
                 (832.40) 
               
               
                 62 
                 18 
                 1,953 
                 43,164 
                 43,164 
                 250,000 
                 (950.64) 
               
               
                 63 
                 19 
                 1,953 
                 46,756 
                 46,756 
                 250,000 
                 (1,064.74) 
               
               
                 64 
                 20 
                 1,953 
                 50,474 
                 50,474 
                 250,000 
                 (1,156.97) 
               
               
                 65 
                 21 
                 1,953 
                 54,284 
                 54,284 
                 250,000 
                 (1,241.18) 
               
               
                 66 
                 22 
                 1,953 
                 58,225 
                 58,225 
                 250,000 
                 (1,308.26) 
               
               
                 67 
                 23 
                 1,953 
                 62,293 
                 62,293 
                 250,000 
                 (1,362.10) 
               
               
                 68 
                 24 
                 1,953 
                 66,487 
                 66,487 
                 250,000 
                 (1,397.02) 
               
               
                 69 
                 25 
                 1,953 
                 70,804 
                 70,804 
                 250,000 
                 (1,426.20) 
               
               
                 70 
                 26 
                 1,953 
                 75,241 
                 75,241 
                 250,000 
                 (1,612.04) 
               
               
                 71 
                 27 
                 1,953 
                 79,781 
                 79,781 
                 250,000 
                 (1,649.05) 
               
               
                 72 
                 28 
                 1,953 
                 84,421 
                 84,421 
                 250,000 
                 (1,681.88) 
               
               
                 73 
                 29 
                 1,953 
                 89,158 
                 89,158 
                 250,000 
                 (1,707.74) 
               
               
                 74 
                 30 
                 1,953 
                 93,985 
                 93,985 
                 250,000 
                 (1,726.57) 
               
               
                 75 
                 31 
                 1,953 
                 98,880 
                 98,880 
                 250,000 
                 (1,730.72) 
               
               
                 76 
                 32 
                 1,953 
                 103,828 
                 103,828 
                 250,000 
                 (1,735.51) 
               
               
                 77 
                 33 
                 1,953 
                 108,814 
                 108,814 
                 250,000 
                 (1,742.48) 
               
               
                 78 
                 34 
                 1,953 
                 113,823 
                 113,823 
                 250,000 
                 (1,740.08) 
               
               
                 79 
                 35 
                 1,953 
                 118,843 
                 118,843 
                 250,000 
                 (1,729.34) 
               
               
                 80 
                 36 
                 1,953 
                 123,863 
                 123,863 
                 250,000 
                 (1,703.06) 
               
               
                 81 
                 37 
                 1,953 
                 128,878 
                 128,878 
                 250,000 
                 (1,662.33) 
               
               
                 82 
                 38 
                 1,953 
                 133,890 
                 133,890 
                 250,000 
                 (1,600.74) 
               
               
                 83 
                 39 
                 1,953 
                 138,900 
                 138,900 
                 250,000 
                 (1,526.07) 
               
               
                 84 
                 40 
                 1,953 
                 143,895 
                 143,895 
                 250,000 
                 (1,453.84) 
               
               
                 85 
                 41 
                 1,953 
                 148,866 
                 148,866 
                 250,000 
                 (1,382.25) 
               
               
                 86 
                 42 
                 1,953 
                 153,818 
                 153,818 
                 250,000 
                 (1,311.68) 
               
               
                 87 
                 43 
                 1,953 
                 158,755 
                 158,755 
                 250,000 
                 (1,225.52) 
               
               
                 88 
                 44 
                 1,953 
                 163,689 
                 163,689 
                 250,000 
                 (1,123.00) 
               
               
                 89 
                 45 
                 1,953 
                 168,654 
                 168,654 
                 250,000 
                 (1,008.15) 
               
               
                 90 
                 46 
                 1,953 
                 173,705 
                 173,705 
                 250,000 
                 (889.81) 
               
               
                 91 
                 47 
                 1,953 
                 178,990 
                 178,990 
                 250,000 
                 (781.83) 
               
               
                 92 
                 48 
                 1,953 
                 184,626 
                 184,626 
                 250,000 
                 (678.58) 
               
               
                 93 
                 49 
                 1,953 
                 190,769 
                 190,769 
                 250,000 
                 (586.37) 
               
               
                 94 
                 50 
                 1,953 
                 197,629 
                 197,629 
                 250,000 
                 (494.41) 
               
               
                 95 
                 51 
                 1,953 
                 204,973 
                 204,973 
                 250,000 
                 (401.70) 
               
               
                 96 
                 52 
                 1,953 
                 213,158 
                 213,158 
                 250,000 
                 (314.80) 
               
               
                 97 
                 53 
                 1,953 
                 222,747 
                 222,747 
                 250,000 
                 (235.46) 
               
               
                 98 
                 54 
                 1,953 
                 234,628 
                 234,628 
                 250,000 
                 (176.61) 
               
               
                 99 
                 55 
                 1,953 
                 250,248 
                 250,248 
                 250,048 
                 (398.97) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE D3 
               
             
             
               
                   
               
               
                 Product Value for Money - Calculation of IRR - Level Lapses 
               
               
                 Company C 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 46 
                 1 
                 2,048 
                 1,044 
                 0 
                 250,000 
                 1,949.69 
                 4.891% 
               
               
                 46 
                 2 
                 2,048 
                 2,589 
                 0 
                 250,000 
                 1,807.47 
               
               
                 47 
                 3 
                 2,048 
                 4,174 
                 0 
                 250,000 
                 1,674.66 
               
               
                 48 
                 4 
                 2,048 
                 5,823 
                 0 
                 250,000 
                 1,547.16 
               
               
                 49 
                 5 
                 2,048 
                 7,551 
                 1,227 
                 250,000 
                 1,367.56 
               
               
                 50 
                 6 
                 2,048 
                 9,369 
                 3,045 
                 250,000 
                 1,161.15 
               
               
                 51 
                 7 
                 2,048 
                 11,288 
                 4,963 
                 250,000 
                 955.37 
               
               
                 52 
                 8 
                 2,048 
                 13,313 
                 6,988 
                 250,000 
                 755.98 
               
               
                 53 
                 9 
                 2,048 
                 15,446 
                 9,122 
                 250,000 
                 574.37 
               
               
                 54 
                 10 
                 2,048 
                 17,688 
                 11,364 
                 250,000 
                 399.99 
               
               
                 55 
                 11 
                 2,048 
                 20,031 
                 14,339 
                 250,000 
                 231.88 
               
               
                 56 
                 12 
                 2,048 
                 22,451 
                 17,391 
                 250,000 
                 52.38 
               
               
                 57 
                 13 
                 2,048 
                 24,934 
                 20,507 
                 250,000 
                 (123.22) 
               
               
                 58 
                 14 
                 2,048 
                 27,484 
                 23,689 
                 250,000 
                 (250.81) 
               
               
                 59 
                 15 
                 2,048 
                 30,102 
                 26,939 
                 250,000 
                 (375.86) 
               
               
                 60 
                 16 
                 2,048 
                 32,752 
                 30,222 
                 250,000 
                 (530.52) 
               
               
                 61 
                 17 
                 2,048 
                 35,494 
                 33,596 
                 250,000 
                 (665.66) 
               
               
                 62 
                 18 
                 2,048 
                 38,330 
                 37,065 
                 250,000 
                 (793.72) 
               
               
                 63 
                 19 
                 2,048 
                 41,265 
                 40,633 
                 250,000 
                 (916.72) 
               
               
                 64 
                 20 
                 2,048 
                 44,303 
                 44,303 
                 250,000 
                 (1,017.10) 
               
               
                 65 
                 21 
                 2,048 
                 47,421 
                 47,421 
                 250,000 
                 (1,098.71) 
               
               
                 66 
                 22 
                 2,048 
                 50,616 
                 50,616 
                 250,000 
                 (1,163.41) 
               
               
                 67 
                 23 
                 2,048 
                 53,904 
                 53,904 
                 250,000 
                 (1,215.43) 
               
               
                 68 
                 24 
                 2,048 
                 57,293 
                 57,293 
                 250,000 
                 (1,249.20) 
               
               
                 69 
                 25 
                 2,048 
                 60,782 
                 60,782 
                 250,000 
                 (1,277.90) 
               
               
                 70 
                 26 
                 2,048 
                 64,369 
                 64,369 
                 250,000 
                 (1,464.07) 
               
               
                 71 
                 27 
                 2,048 
                 68,055 
                 68,055 
                 250,000 
                 (1,502.54) 
               
               
                 72 
                 28 
                 2,048 
                 71,843 
                 71,843 
                 250,000 
                 (1,537.73) 
               
               
                 73 
                 29 
                 2,048 
                 75,734 
                 75,734 
                 250,000 
                 (1,566.79) 
               
               
                 74 
                 30 
                 2,048 
                 79,724 
                 79,724 
                 250,000 
                 (1,589.64) 
               
               
                 75 
                 31 
                 2,048 
                 83,809 
                 83,809 
                 250,000 
                 (1,598.64) 
               
               
                 76 
                 32 
                 2,048 
                 87,983 
                 87,983 
                 250,000 
                 (1,609.07) 
               
               
                 77 
                 33 
                 2,048 
                 92,240 
                 92,240 
                 250,000 
                 (1,622.42) 
               
               
                 78 
                 34 
                 2,048 
                 96,575 
                 96,575 
                 250,000 
                 (1,627.09) 
               
               
                 79 
                 35 
                 2,048 
                 100,987 
                 100,987 
                 250,000 
                 (1,624.02) 
               
               
                 80 
                 36 
                 2,048 
                 105,476 
                 105,476 
                 250,000 
                 (1,605.88) 
               
               
                 81 
                 37 
                 2,048 
                 110,047 
                 110,047 
                 250,000 
                 (1,573.63) 
               
               
                 82 
                 38 
                 2,048 
                 114,711 
                 114,711 
                 250,000 
                 (1,520.67) 
               
               
                 83 
                 39 
                 2,048 
                 119,482 
                 119,482 
                 250,000 
                 (1,454.62) 
               
               
                 84 
                 40 
                 2,048 
                 124,363 
                 124,363 
                 250,000 
                 (1,390.89) 
               
               
                 85 
                 41 
                 2,048 
                 129,360 
                 129,360 
                 250,000 
                 (1,327.61) 
               
               
                 86 
                 42 
                 2,048 
                 134,488 
                 134,488 
                 250,000 
                 (1,265.04) 
               
               
                 87 
                 43 
                 2,048 
                 139,768 
                 139,768 
                 250,000 
                 (1,186.48) 
               
               
                 88 
                 44 
                 2,048 
                 145,231 
                 145,231 
                 250,000 
                 (1,091.00) 
               
               
                 89 
                 45 
                 2,048 
                 150,929 
                 150,929 
                 250,000 
                 (982.52) 
               
               
                 90 
                 46 
                 2,048 
                 156,935 
                 156,935 
                 250,000 
                 (869.78) 
               
               
                 91 
                 47 
                 2,048 
                 163,342 
                 163,342 
                 250,000 
                 (766.55) 
               
               
                 92 
                 48 
                 2,048 
                 170,263 
                 170,263 
                 250,000 
                 (667.26) 
               
               
                 93 
                 49 
                 2,048 
                 177,843 
                 177,843 
                 250,000 
                 (578.26) 
               
               
                 94 
                 50 
                 2,048 
                 186,264 
                 186,264 
                 250,000 
                 (488.83) 
               
               
                 95 
                 51 
                 2,048 
                 195,758 
                 195,758 
                 250,000 
                 (398.17) 
               
               
                 96 
                 52 
                 2,048 
                 206,617 
                 206,617 
                 250,000 
                 (312.81) 
               
               
                 97 
                 53 
                 2,048 
                 219,221 
                 219,221 
                 250,000 
                 (234.52) 
               
               
                 98 
                 54 
                 2,048 
                 234,056 
                 234,056 
                 250,000 
                 (176.28) 
               
               
                 99 
                 55 
                 2,048 
                 251,745 
                 251,745 
                 251,745 
                 (401.25) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE D4 
               
             
             
               
                   
               
               
                 Product Value for Money - Calculation of IRR - Level Lapses 
               
               
                 Company D 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 1,648 
                 1,387 
                 0 
                 250,000 
                 1,549.69 
                 6.335% 
               
               
                 46 
                 2 
                 1,648 
                 2,800 
                 0 
                 250,000 
                 1,427.63 
               
               
                 47 
                 3 
                 1,648 
                 4,242 
                 0 
                 250,000 
                 1,314.04 
               
               
                 48 
                 4 
                 1,648 
                 5,717 
                 0 
                 250,000 
                 1,204.85 
               
               
                 49 
                 5 
                 1,648 
                 7,255 
                 523 
                 250,000 
                 1,071.27 
               
               
                 50 
                 6 
                 1,648 
                 8,833 
                 2,435 
                 250,000 
                 876.42 
               
               
                 51 
                 7 
                 1,648 
                 10,482 
                 4,430 
                 250,000 
                 682.52 
               
               
                 52 
                 8 
                 1,648 
                 12,180 
                 6,487 
                 250,000 
                 496.22 
               
               
                 53 
                 9 
                 1,648 
                 13,929 
                 8,609 
                 250,000 
                 328.63 
               
               
                 54 
                 10 
                 1,648 
                 15,705 
                 10,772 
                 250,000 
                 169.71 
               
               
                 55 
                 11 
                 1,648 
                 17,453 
                 12,923 
                 250,000 
                 38.09 
               
               
                 56 
                 12 
                 1,648 
                 19,174 
                 15,062 
                 250,000 
                 (105.62) 
               
               
                 57 
                 13 
                 1,648 
                 21,011 
                 17,333 
                 250,000 
                 (250.46) 
               
               
                 58 
                 14 
                 1,648 
                 22,969 
                 19,744 
                 250,000 
                 (351.92) 
               
               
                 59 
                 15 
                 1,648 
                 25,058 
                 22,308 
                 250,000 
                 (455.32) 
               
               
                 60 
                 16 
                 1,648 
                 27,287 
                 25,032 
                 250,000 
                 (593.21) 
               
               
                 61 
                 17 
                 1,648 
                 29,664 
                 27,932 
                 250,000 
                 (714.96) 
               
               
                 62 
                 18 
                 1,648 
                 32,200 
                 31,012 
                 250,000 
                 (832.59) 
               
               
                 63 
                 19 
                 1,648 
                 34,905 
                 34,295 
                 250,000 
                 (948.10) 
               
               
                 64 
                 20 
                 1,648 
                 37,790 
                 37,790 
                 250,000 
                 (1,043.62) 
               
               
                 65 
                 21 
                 1,648 
                 40,816 
                 40,816 
                 250,000 
                 (1,122.18) 
               
               
                 66 
                 22 
                 1,648 
                 43,943 
                 43,943 
                 250,000 
                 (1,184.43) 
               
               
                 67 
                 23 
                 1,648 
                 47,230 
                 47,230 
                 250,000 
                 (1,235.16) 
               
               
                 68 
                 24 
                 1,648 
                 50,616 
                 50,616 
                 250,000 
                 (1,267.66) 
               
               
                 69 
                 25 
                 1,648 
                 54,111 
                 54,111 
                 250,000 
                 (1,295.26) 
               
               
                 70 
                 26 
                 1,648 
                 57,657 
                 57,657 
                 250,000 
                 (1,479.95) 
               
               
                 71 
                 27 
                 1,648 
                 61,286 
                 61,286 
                 250,000 
                 (1,516.76) 
               
               
                 72 
                 28 
                 1,648 
                 65,034 
                 65,034 
                 250,000 
                 (1,550.58) 
               
               
                 73 
                 29 
                 1,648 
                 68,893 
                 68,893 
                 250,000 
                 (1,578.46) 
               
               
                 74 
                 30 
                 1,648 
                 72,878 
                 72,878 
                 250,000 
                 (1,600.44) 
               
               
                 75 
                 31 
                 1,648 
                 76,961 
                 76,961 
                 250,000 
                 (1,608.63) 
               
               
                 76 
                 32 
                 1,648 
                 81,159 
                 81,159 
                 250,000 
                 (1,618.48) 
               
               
                 77 
                 33 
                 1,648 
                 85,490 
                 85,490 
                 250,000 
                 (1,631.59) 
               
               
                 78 
                 34 
                 1,648 
                 89,913 
                 89,913 
                 250,000 
                 (1,636.04) 
               
               
                 79 
                 35 
                 1,648 
                 94,450 
                 94,450 
                 250,000 
                 (1,632.88) 
               
               
                 80 
                 36 
                 1,648 
                 99,103 
                 99,103 
                 250,000 
                 (1,614.73) 
               
               
                 81 
                 37 
                 1,648 
                 103,843 
                 103,843 
                 250,000 
                 (1,582.35) 
               
               
                 82 
                 38 
                 1,648 
                 108,731 
                 108,731 
                 250,000 
                 (1,529.35) 
               
               
                 83 
                 39 
                 1,648 
                 113,745 
                 113,745 
                 250,000 
                 (1,463.16) 
               
               
                 84 
                 40 
                 1,648 
                 118,901 
                 118,901 
                 250,000 
                 (1,399.27) 
               
               
                 85 
                 41 
                 1,648 
                 124,220 
                 124,220 
                 250,000 
                 (1,335.79) 
               
               
                 86 
                 42 
                 1,648 
                 129,756 
                 129,756 
                 250,000 
                 (1,273.06) 
               
               
                 87 
                 43 
                 1,648 
                 135,527 
                 135,527 
                 250,000 
                 (1,194.30) 
               
               
                 88 
                 44 
                 1,648 
                 141,585 
                 141,585 
                 250,000 
                 (1,098.57) 
               
               
                 89 
                 45 
                 1,648 
                 147,976 
                 147,976 
                 250,000 
                 (989.76) 
               
               
                 90 
                 46 
                 1,648 
                 154,755 
                 154,755 
                 250,000 
                 (876.60) 
               
               
                 91 
                 47 
                 1,648 
                 161,991 
                 161,991 
                 250,000 
                 (772.84) 
               
               
                 92 
                 48 
                 1,648 
                 169,755 
                 169,755 
                 250,000 
                 (672.90) 
               
               
                 93 
                 49 
                 1,648 
                 178,135 
                 178,135 
                 250,000 
                 (583.16) 
               
               
                 94 
                 50 
                 1,648 
                 187,254 
                 187,254 
                 250,000 
                 (492.91) 
               
               
                 95 
                 51 
                 1,648 
                 197,236 
                 197,236 
                 250,000 
                 (401.41) 
               
               
                 96 
                 52 
                 1,648 
                 208,253 
                 208,253 
                 250,000 
                 (315.25) 
               
               
                 97 
                 53 
                 1,648 
                 220,519 
                 220,519 
                 250,000 
                 (236.24) 
               
               
                 98 
                 54 
                 1,648 
                 234,314 
                 234,314 
                 250,000 
                 (177.40) 
               
               
                 99 
                 55 
                 1,648 
                 250,002 
                 250,002 
                 250,002 
                 (399.23) 
               
               
                   
               
             
          
         
       
     
     In this instance, the objective was to endow at age 100. A planned premium to achieve the objective for each of the example companies A, B, C, and D is shown in Table E. 
     
       
         
               
             
               
               
               
               
               
             
               
               
               
               
               
             
           
               
                 TABLE E 
               
             
             
               
                   
               
               
                 Product Value for Money - 
               
               
                 Planned Premium to Achieve Objective 
               
             
          
           
               
                   
                 Company 
                 Company 
                 Company 
                 Company 
               
               
                   
                 A 
                 B 
                 C 
                 D 
               
               
                   
               
             
          
           
               
                 Planned Premium 
                 $2,125 
                 $1,953 
                 $2,048 
                 $1,648 
               
               
                 to Achieve Objective 
               
               
                   
               
             
          
         
       
     
     The premiums to meet this objective are annual premiums, which range from $1,648 for Company D to $2,125 for Company A. The high and low points were set at $1,600 (normalized score of 5) and $2,500 (normalized score of 0) respectively, a range of $900. On this scale, Company D got a normalized score of 4.7 (48/900 of the way between 5 and 0). 
     For product flexibility, one point is given for each of the six features. The high point is 5 and the low point is 0. The interpolation here works out so that the normalized score is the number of points for each product, but not more than 5. 
     Product flexibility for each of the example companies A, B, C, and D, is shown in Table F. 
     
       
         
               
             
               
               
               
               
               
             
               
               
               
               
               
             
           
               
                 TABLE F 
               
             
             
               
                   
               
               
                 Product Value for Money - Flexibility 
               
             
          
           
               
                 Flexibility 
                 Company 
                 Company 
                 Company 
                 Company 
               
               
                 (1 = Y, 0  =N) 
                 A 
                 B 
                 C 
                 D 
               
               
                   
               
             
          
           
               
                 No lapse guarantee 
                 1 
                 0 
                 0 
                 1 
               
               
                 Term rider 
                 1 
                 1 
                 1 
                 1 
               
               
                 Penalty-free 
                 1 
                 0 
                 0 
                 1 
               
               
                 withdrawals 
               
               
                 Preferred loans 
                 0 
                 1 
                 1 
                 1 
               
               
                 COI refunds 
                 0 
                 1 
                 0 
                 1 
               
               
                 Persistency bonus 
                 1 
                 0 
                 1 
                 0 
               
               
                 Total 
                 4 
                 3 
                 3 
                 5 
               
               
                   
               
             
          
         
       
     
     Finally, the weighted average of the four metrics is calculated, giving effect to the weights from table A. 
     Product Stress Tolerance 
     A similar process is followed for this scoring driver. For two of the policies, Company A and Company C, the illustration at the midpoint in this example does not produce an IRR because the product failed. I.e., the policyholder group, on average, did not get back as much money as they put in. In those cases, the ratio of 20-year Cash Surrender Values provides a more discriminating metric. 
     Calculations for Product Stress Tolerance for each of the example companies is shown in Table G1-G4. 
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE G1 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - Midpoint Assumptions 
               
               
                 Company A 
               
             
          
           
               
                   
                   
                   
                 Current 
                   
                 Midpoint 
                   
                   
               
               
                 Age 
                 Duration 
                 Premium 
                 CSV 
                 DB 
                 Cash Value 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 2,125 
                 0 
                 250,000 
                 0 
                 2,026.69 
                 0.00% 
               
               
                 46 
                 2 
                 2,125 
                 0 
                 250,000 
                 0 
                 1,880.59 
               
               
                 47 
                 3 
                 2,125 
                 0 
                 250,000 
                 0 
                 1,744.08 
               
               
                 48 
                 4 
                 2,125 
                 0 
                 250,000 
                 0 
                 1,613.06 
               
               
                 49 
                 5 
                 2,125 
                 567 
                 250,000 
                 0 
                 1,479.89 
               
               
                 50 
                 6 
                 2,125 
                 2,751 
                 250,000 
                 43 
                 1,336.05 
               
               
                 51 
                 7 
                 2,125 
                 5,064 
                 250,000 
                 1,485 
                 1,138.59 
               
               
                 52 
                 8 
                 2,125 
                 7,483 
                 250,000 
                 2,904 
                 950.61 
               
               
                 53 
                 9 
                 2,125 
                 10,037 
                 250,000 
                 4,298 
                 783.00 
               
               
                 54 
                 10 
                 2,125 
                 12,732 
                 250,000 
                 5,651 
                 625.12 
               
               
                 55 
                 11 
                 2,125 
                 16,396 
                 250,000 
                 7,798 
                 469.26 
               
               
                 56 
                 12 
                 2,125 
                 19,944 
                 250,000 
                 9,664 
                 309.87 
               
               
                 57 
                 13 
                 2,125 
                 23,446 
                 250,000 
                 11,265 
                 159.95 
               
               
                 58 
                 14 
                 2,125 
                 26,908 
                 250,000 
                 12,581 
                 62.96 
               
               
                 59 
                 15 
                 2,125 
                 30,338 
                 250,000 
                 13,619 
                 (27.83) 
               
               
                 60 
                 16 
                 2,125 
                 33,278 
                 250,000 
                 13,867 
                 (135.15) 
               
               
                 61 
                 17 
                 2,125 
                 36,352 
                 250,000 
                 13,910 
                 (223.70) 
               
               
                 62 
                 18 
                 2,125 
                 39,560 
                 250,000 
                 13,703 
                 (305.59) 
               
               
                 63 
                 19 
                 2,125 
                 42,908 
                 250,000 
                 13,199 
                 (382.65) 
               
               
                 64 
                 20 
                 2,125 
                 46,398 
                 250,000 
                 12,343 
                 (437.14) 
               
               
                 65 
                 21 
                 2,125 
                 50,054 
                 250,000 
                 11,087 
                 (483.63) 
               
               
                 66 
                 22 
                 2,125 
                 53,858 
                 250,000 
                 9,359 
                 (512.22) 
               
               
                 67 
                 23 
                 2,125 
                 57,809 
                 250,000 
                 7,087 
                 (526.89) 
               
               
                 68 
                 24 
                 2,125 
                 61,906 
                 250,000 
                 4,190 
                 (521.98) 
               
               
                 69 
                 25 
                 2,125 
                 66,140 
                 250,000 
                 560 
                 (510.49) 
               
               
                 70 
                 26 
                 2,125 
                 70,502 
                 250,000 
                 0 
                 (701.52) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE G2 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - Midpoint Assumptions 
               
               
                 Company B 
               
             
          
           
               
                   
                   
                   
                 Current 
                   
                 Midpoint 
                   
                   
               
               
                 Age 
                 Duration 
                 Premium 
                 CSV 
                 DB 
                 Cash Value 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 1,953 
                 0 
                 250,000 
                 0 
                 1,854.69 
                 0.00% 
               
               
                 46 
                 2 
                 1,953 
                 0 
                 250,000 
                 0 
                 1,717.26 
               
               
                 47 
                 3 
                 1,953 
                 0 
                 250,000 
                 0 
                 1,589.02 
               
               
                 48 
                 4 
                 1,953 
                 663 
                 250,000 
                 0 
                 1,465.86 
               
               
                 49 
                 5 
                 1,953 
                 2,911 
                 250,000 
                 975 
                 1,300.63 
               
               
                 50 
                 6 
                 1,953 
                 5,394 
                 250,000 
                 3,231 
                 1,080.79 
               
               
                 51 
                 7 
                 1,953 
                 7,992 
                 250,000 
                 4,787 
                 892.36 
               
               
                 52 
                 8 
                 1,953 
                 10,713 
                 250,000 
                 6,417 
                 709.93 
               
               
                 53 
                 9 
                 1,953 
                 13,561 
                 250,000 
                 8,123 
                 544.75 
               
               
                 54 
                 10 
                 1,953 
                 16,541 
                 250,000 
                 9,908 
                 386.11 
               
               
                 55 
                 11 
                 1,953 
                 19,637 
                 250,000 
                 10,906 
                 276.80 
               
               
                 56 
                 12 
                 1,953 
                 22,847 
                 250,000 
                 11,903 
                 151.91 
               
               
                 57 
                 13 
                 1,953 
                 26,164 
                 250,000 
                 12,901 
                 26.46 
               
               
                 58 
                 14 
                 1,953 
                 29,593 
                 250,000 
                 13,898 
                 (55.26) 
               
               
                 59 
                 15 
                 1,953 
                 33,139 
                 250,000 
                 14,896 
                 (138.52) 
               
               
                 60 
                 16 
                 1,953 
                 36,537 
                 250,000 
                 15,894 
                 (256.16) 
               
               
                 61 
                 17 
                 1,953 
                 39,699 
                 250,000 
                 16,891 
                 (357.65) 
               
               
                 62 
                 18 
                 1,953 
                 43,164 
                 250,000 
                 17,889 
                 (455.34) 
               
               
                 63 
                 19 
                 1,953 
                 46,756 
                 250,000 
                 18,886 
                 (551.17) 
               
               
                 64 
                 20 
                 1,953 
                 50,474 
                 250,000 
                 19,884 
                 (627.54) 
               
               
                 65 
                 21 
                 1,953 
                 54,284 
                 250,000 
                 18,249 
                 (656.13) 
               
               
                 66 
                 22 
                 1,953 
                 58,225 
                 250,000 
                 16,615 
                 (675.28) 
               
               
                 67 
                 23 
                 1,953 
                 62,293 
                 250,000 
                 14,980 
                 (688.59) 
               
               
                 68 
                 24 
                 1,953 
                 66,487 
                 250,000 
                 13,345 
                 (689.93) 
               
               
                 69 
                 25 
                 1,953 
                 70,804 
                 250,000 
                 11,711 
                 (692.11) 
               
               
                 70 
                 26 
                 1,953 
                 75,241 
                 250,000 
                 10,076 
                 (858.28) 
               
               
                 71 
                 27 
                 1,953 
                 79,781 
                 250,000 
                 9,068 
                 (889.97) 
               
               
                 72 
                 28 
                 1,953 
                 84,421 
                 250,000 
                 8,061 
                 (922.85) 
               
               
                 73 
                 29 
                 1,953 
                 89,158 
                 250,000 
                 7,053 
                 (953.88) 
               
               
                 74 
                 30 
                 1,953 
                 93,985 
                 250,000 
                 6,046 
                 (982.81) 
               
               
                 75 
                 31 
                 1,953 
                 98,880 
                 250,000 
                 5,038 
                 (1,001.76) 
               
               
                 76 
                 32 
                 1,953 
                 103,828 
                 250,000 
                 4,030 
                 (1,025.81) 
               
               
                 77 
                 33 
                 1,953 
                 108,814 
                 250,000 
                 3,023 
                 (1,056.41) 
               
               
                 78 
                 34 
                 1,953 
                 113,823 
                 250,000 
                 2,015 
                 (1,081.81) 
               
               
                 79 
                 35 
                 1,953 
                 118,843 
                 250,000 
                 1,008 
                 (1,102.67) 
               
               
                 80 
                 36 
                 1,953 
                 123,863 
                 250,000 
                 — 
                 (1,111.30) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE G3 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - Midpoint Assumptions 
               
               
                 Company C 
               
             
          
           
               
                   
                   
                   
                 Current 
                   
                 Midpoint 
                   
                   
               
               
                 Age 
                 Duration 
                 Premium 
                 CSV 
                 DB 
                 Cash Value 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 2,048 
                 0 
                 250,000 
                 0 
                 1,949.69 
                 0.00% 
               
               
                 46 
                 2 
                 2,048 
                 0 
                 250,000 
                 0 
                 1,807.47 
               
               
                 47 
                 3 
                 2,048 
                 0 
                 250,000 
                 0 
                 1,674.66 
               
               
                 48 
                 4 
                 2,048 
                 0 
                 250,000 
                 0 
                 1,547.16 
               
               
                 49 
                 5 
                 2,048 
                 1,227 
                 250,000 
                 0 
                 1,417.35 
               
               
                 50 
                 6 
                 2,048 
                 3,045 
                 250,000 
                 1,664 
                 1,214.32 
               
               
                 51 
                 7 
                 2,048 
                 4,963 
                 250,000 
                 2,712 
                 1,037.53 
               
               
                 52 
                 8 
                 2,048 
                 6,988 
                 250,000 
                 3,819 
                 865.63 
               
               
                 53 
                 9 
                 2,048 
                 9,122 
                 250,000 
                 4,985 
                 709.95 
               
               
                 54 
                 10 
                 2,048 
                 11,364 
                 250,000 
                 6,210 
                 559.91 
               
               
                 55 
                 11 
                 2,048 
                 14,339 
                 250,000 
                 6,366 
                 466.00 
               
               
                 56 
                 12 
                 2,048 
                 17,391 
                 250,000 
                 7,721 
                 320.96 
               
               
                 57 
                 13 
                 2,048 
                 20,507 
                 250,000 
                 9,104 
                 176.13 
               
               
                 58 
                 14 
                 2,048 
                 23,689 
                 250,000 
                 10,517 
                 75.84 
               
               
                 59 
                 15 
                 2,048 
                 26,939 
                 250,000 
                 11,960 
                 (25.16) 
               
               
                 60 
                 16 
                 2,048 
                 30,222 
                 250,000 
                 13,418 
                 (159.36) 
               
               
                 61 
                 17 
                 2,048 
                 33,596 
                 250,000 
                 14,915 
                 (276.82) 
               
               
                 62 
                 18 
                 2,048 
                 37,065 
                 250,000 
                 16,456 
                 (389.85) 
               
               
                 63 
                 19 
                 2,048 
                 40,633 
                 250,000 
                 18,040 
                 (500.38) 
               
               
                 64 
                 20 
                 2,048 
                 44,303 
                 250,000 
                 19,669 
                 (590.74) 
               
               
                 65 
                 21 
                 2,048 
                 47,421 
                 250,000 
                 18,536 
                 (629.74) 
               
               
                 66 
                 22 
                 2,048 
                 50,616 
                 250,000 
                 17,404 
                 (658.18) 
               
               
                 67 
                 23 
                 2,048 
                 53,904 
                 250,000 
                 16,271 
                 (679.72) 
               
               
                 68 
                 24 
                 2,048 
                 57,293 
                 250,000 
                 15,138 
                 (688.31) 
               
               
                 69 
                 25 
                 2,048 
                 60,782 
                 250,000 
                 14,006 
                 (696.82) 
               
               
                 70 
                 26 
                 2,048 
                 64,369 
                 250,000 
                 12,873 
                 (868.42) 
               
               
                 71 
                 27 
                 2,048 
                 68,055 
                 250,000 
                 8,582 
                 (864.12) 
               
               
                 72 
                 28 
                 2,048 
                 71,843 
                 250,000 
                 4,291 
                 (866.25) 
               
               
                 73 
                 29 
                 2,048 
                 75,734 
                 250,000 
                 0 
                 (871.43) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE G4 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - Midpoint Assumptions 
               
               
                 Company D 
               
             
          
           
               
                   
                   
                   
                 Current 
                   
                 Midpoint 
                   
                   
               
               
                 Age 
                 Duration 
                 Premium 
                 CSV 
                 DB 
                 Cash Value 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 1,648 
                 0 
                 250,000 
                 0 
                 1,549.69 
                 0.00% 
               
               
                 46 
                 2 
                 1,648 
                 0 
                 250,000 
                 0 
                 1,427.63 
               
               
                 47 
                 3 
                 1,648 
                 0 
                 250,000 
                 0 
                 1,314.04 
               
               
                 48 
                 4 
                 1,648 
                 0 
                 250,000 
                 0 
                 1,204.85 
               
               
                 49 
                 5 
                 1,648 
                 523 
                 250,000 
                 0 
                 1,092.50 
               
               
                 50 
                 6 
                 1,648 
                 2,435 
                 250,000 
                 1,055 
                 929.53 
               
               
                 51 
                 7 
                 1,648 
                 4,430 
                 250,000 
                 1,920 
                 774.13 
               
               
                 52 
                 8 
                 1,648 
                 6,487 
                 250,000 
                 2,812 
                 623.36 
               
               
                 53 
                 9 
                 1,648 
                 8,609 
                 250,000 
                 3,731 
                 488.47 
               
               
                 54 
                 10 
                 1,648 
                 10,772 
                 250,000 
                 4,669 
                 359.07 
               
               
                 55 
                 11 
                 1,648 
                 12,923 
                 250,000 
                 5,281 
                 262.50 
               
               
                 56 
                 12 
                 1,648 
                 15,062 
                 250,000 
                 5,892 
                 149.06 
               
               
                 57 
                 13 
                 1,648 
                 17,333 
                 250,000 
                 6,504 
                 33.83 
               
               
                 58 
                 14 
                 1,648 
                 19,744 
                 250,000 
                 7,116 
                 (38.76) 
               
               
                 59 
                 15 
                 1,648 
                 22,308 
                 250,000 
                 7,728 
                 (113.95) 
               
               
                 60 
                 16 
                 1,648 
                 25,032 
                 250,000 
                 8,339 
                 (224.52) 
               
               
                 61 
                 17 
                 1,648 
                 27,932 
                 250,000 
                 8,951 
                 (319.86) 
               
               
                 62 
                 18 
                 1,648 
                 31,012 
                 250,000 
                 9,563 
                 (412.26) 
               
               
                 63 
                 19 
                 1,648 
                 34,295 
                 250,000 
                 10,174 
                 (503.62) 
               
               
                 64 
                 20 
                 1,648 
                 37,790 
                 250,000 
                 10,786 
                 (576.25) 
               
               
                 65 
                 21 
                 1,648 
                 40,816 
                 250,000 
                 8,835 
                 (602.94) 
               
               
                 66 
                 22 
                 1,648 
                 43,943 
                 250,000 
                 6,884 
                 (620.69) 
               
               
                 67 
                 23 
                 1,648 
                 47,230 
                 250,000 
                 4,933 
                 (633.05) 
               
               
                 68 
                 24 
                 1,648 
                 50,616 
                 250,000 
                 2,982 
                 (633.85) 
               
               
                 69 
                 25 
                 1,648 
                 54,111 
                 250,000 
                 1,031 
                 (635.87) 
               
               
                 70 
                 26 
                 1,648 
                 57,657 
                 250,000 
                 0 
                 (813.04) 
               
               
                   
               
             
          
         
       
     
     The ratios of 20-Year cash values on midpoint and current assumptions are shown in Table H, and the years in force at midpoint assumptions are shown in Table I. 
     
       
         
               
             
               
               
               
               
               
             
           
               
                 TABLE H 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - Ratio of 20-year 
               
               
                 Cash Values on Midpoint and Current Assumptions 
               
             
          
           
               
                   
                 Company 
                 Company 
                 Company 
                 Company 
               
               
                   
                 A 
                 B 
                 C 
                 D 
               
               
                   
               
               
                 CV 20   MIDPOINT   
                 12,343 
                 19,884 
                 19,669 
                 10,786 
               
               
                 CV 20   CURRENT   
                 46,398 
                 50,474 
                 44,303 
                 37,790 
               
               
                 Ratio 
                 26.60% 
                 39.39% 
                 44.40% 
                 28.54% 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
             
               
               
               
               
               
             
           
               
                 TABLE I 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - 
               
               
                 Years in Force at Midpoint Assumptions 
               
             
          
           
               
                   
                 Company 
                 Company 
                 Company 
                 Company 
               
               
                   
                 A 
                 B 
                 C 
                 D 
               
               
                   
               
             
          
           
               
                 Years in force at 
                 26 
                 36 
                 29 
                 26 
               
               
                 Midpoint Assumptions 
               
               
                   
               
             
          
         
       
     
     Calculation of IRR premium reduction in years 4 and later for each of the example companies is shown in Tables J1-J4. 
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE J1 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - Calculation of IRR 
               
               
                 Premium Reduction in Years 4 and Later 
               
               
                 Company A 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 2,125 
                 525 
                 0 
                 250,000 
                 2,026.69 
                 2.642% 
               
               
                 46 
                 2 
                 2,125 
                 2,001 
                 0 
                 250,000 
                 1,880.59 
               
               
                 47 
                 3 
                 2,125 
                 3,564 
                 0 
                 250,000 
                 1,744.08 
               
               
                 48 
                 4 
                 1,063 
                 4,147 
                 0 
                 250,000 
                 703.80 
               
               
                 49 
                 5 
                 1,063 
                 4,739 
                 0 
                 250,000 
                 616.99 
               
               
                 50 
                 6 
                 1,063 
                 5,380 
                 0 
                 250,000 
                 519.02 
               
               
                 51 
                 7 
                 1,063 
                 6,057 
                 308 
                 250,000 
                 405.11 
               
               
                 52 
                 8 
                 1,063 
                 6,740 
                 1,328 
                 250,000 
                 269.08 
               
               
                 53 
                 9 
                 1,063 
                 7,450 
                 2,390 
                 250,000 
                 148.11 
               
               
                 54 
                 10 
                 1,063 
                 8,184 
                 3,489 
                 250,000 
                 31.72 
               
               
                 55 
                 11 
                 1,063 
                 8,872 
                 5,419 
                 250,000 
                 (86.08) 
               
               
                 56 
                 12 
                 1,063 
                 9,452 
                 7,100 
                 250,000 
                 (210.45) 
               
               
                 57 
                 13 
                 1,063 
                 10,004 
                 8,599 
                 250,000 
                 (329.38) 
               
               
                 58 
                 14 
                 1,063 
                 10,524 
                 9,908 
                 250,000 
                 (399.22) 
               
               
                 59 
                 15 
                 1,063 
                 10,986 
                 10,986 
                 250,000 
                 (465.25) 
               
               
                 60 
                 16 
                 1,063 
                 11,395 
                 11,395 
                 250,000 
                 (551.58) 
               
               
                 61 
                 17 
                 1,063 
                 11,745 
                 11,745 
                 250,000 
                 (622.76) 
               
               
                 62 
                 18 
                 1,063 
                 12,018 
                 12,018 
                 250,000 
                 (690.90) 
               
               
                 63 
                 19 
                 1,063 
                 12,199 
                 12,199 
                 250,000 
                 (757.83) 
               
               
                 64 
                 20 
                 1,063 
                 12,271 
                 12,271 
                 250,000 
                 (805.78) 
               
               
                 65 
                 21 
                 1,063 
                 12,234 
                 12,234 
                 250,000 
                 (849.45) 
               
               
                 66 
                 22 
                 1,063 
                 12,042 
                 12,042 
                 250,000 
                 (878.51) 
               
               
                 67 
                 23 
                 1,063 
                 11,660 
                 11,660 
                 250,000 
                 (896.75) 
               
               
                 68 
                 24 
                 1,063 
                 11,050 
                 11,050 
                 250,000 
                 (898.26) 
               
               
                 69 
                 25 
                 1,063 
                 10,159 
                 10,159 
                 250,000 
                 (895.97) 
               
               
                 70 
                 26 
                 1,063 
                 8,926 
                 8,926 
                 250,000 
                 (1,053.17) 
               
               
                 71 
                 27 
                 1,063 
                 7,272 
                 7,272 
                 250,000 
                 (1,064.09) 
               
               
                 72 
                 28 
                 1,063 
                 5,100 
                 5,100 
                 250,000 
                 (1,072.71) 
               
               
                 73 
                 29 
                 1,063 
                 2,290 
                 2,290 
                 250,000 
                 (1,075.96) 
               
               
                 74 
                 30 
                 0 
                 0 
                 0 
                   0 
                  0 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE J2 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - Calculation of IRR 
               
               
                 Premium Reduction in Years 4 and Later 
               
               
                 Company B 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 1,953 
                 909 
                 0 
                 250,000 
                 1,854.69 
                 5.883% 
               
               
                 46 
                 2 
                 1,953 
                 2,409 
                 0 
                 250,000 
                 1,717.26 
               
               
                 47 
                 3 
                 1,953 
                 3,972 
                 0 
                 250,000 
                 1,589.02 
               
               
                 48 
                 4 
                 977 
                 4,669 
                 0 
                 250,000 
                 630.20 
               
               
                 49 
                 5 
                 977 
                 5,430 
                 907 
                 250,000 
                 510.34 
               
               
                 50 
                 6 
                 977 
                 6,356 
                 2,285 
                 250,000 
                 364.79 
               
               
                 51 
                 7 
                 977 
                 7,322 
                 3,704 
                 250,000 
                 218.31 
               
               
                 52 
                 8 
                 977 
                 8,330 
                 5,164 
                 250,000 
                 76.80 
               
               
                 53 
                 9 
                 977 
                 9,379 
                 6,665 
                 250,000 
                 (48.43) 
               
               
                 54 
                 10 
                 977 
                 10,467 
                 8,205 
                 250,000 
                 (168.07) 
               
               
                 55 
                 11 
                 977 
                 11,570 
                 9,761 
                 250,000 
                 (264.18) 
               
               
                 56 
                 12 
                 977 
                 12,679 
                 11,322 
                 250,000 
                 (375.59) 
               
               
                 57 
                 13 
                 977 
                 13,777 
                 12,873 
                 250,000 
                 (486.86) 
               
               
                 58 
                 14 
                 977 
                 14,860 
                 14,407 
                 250,000 
                 (553.56) 
               
               
                 59 
                 15 
                 977 
                 15,920 
                 15,920 
                 250,000 
                 (621.17) 
               
               
                 60 
                 16 
                 977 
                 16,956 
                 16,956 
                 250,000 
                 (712.53) 
               
               
                 61 
                 17 
                 977 
                 17,950 
                 17,950 
                 250,000 
                 (787.86) 
               
               
                 62 
                 18 
                 977 
                 18,890 
                 18,890 
                 250,000 
                 (859.42) 
               
               
                 63 
                 19 
                 977 
                 19,760 
                 19,760 
                 250,000 
                 (929.02) 
               
               
                 64 
                 20 
                 977 
                 20,542 
                 20,542 
                 250,000 
                 (978.87) 
               
               
                 65 
                 21 
                 977 
                 21,172 
                 21,172 
                 250,000 
                 (1,022.67) 
               
               
                 66 
                 22 
                 977 
                 21,672 
                 21,672 
                 250,000 
                 (1,051.35) 
               
               
                 67 
                 23 
                 977 
                 22,008 
                 22,008 
                 250,000 
                 (1,068.72) 
               
               
                 68 
                 24 
                 977 
                 22,148 
                 22,148 
                 250,000 
                 (1,068.99) 
               
               
                 69 
                 25 
                 977 
                 22,048 
                 22,048 
                 250,000 
                 (1,065.22) 
               
               
                 70 
                 26 
                 977 
                 21,664 
                 21,664 
                 250,000 
                 (1,220.62) 
               
               
                 71 
                 27 
                 977 
                 20,921 
                 20,921 
                 250,000 
                 (1,229.29) 
               
               
                 72 
                 28 
                 977 
                 19,756 
                 19,756 
                 250,000 
                 (1,235.71) 
               
               
                 73 
                 29 
                 977 
                 18,093 
                 18,093 
                 250,000 
                 (1,237.07) 
               
               
                 74 
                 30 
                 977 
                 15,837 
                 15,837 
                 250,000 
                 (1,233.34) 
               
               
                 75 
                 31 
                 977 
                 12,854 
                 12,854 
                 250,000 
                 (1,216.73) 
               
               
                 76 
                 32 
                 977 
                 8,998 
                 8,998 
                 250,000 
                 (1,202.59) 
               
               
                 77 
                 33 
                 977 
                 4,091 
                 4,091 
                 250,000 
                 (1,192.59) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE J3 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - Calculation of IRR 
               
               
                 Premium Reduction in Years 4 and Later 
               
               
                 Company C 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 2,048 
                 1,098 
                 0 
                 250,000 
                 1,949.69 
                 3.824% 
               
               
                 46 
                 2 
                 2,048 
                 2,705 
                 0 
                 250,000 
                 1,807.47 
               
               
                 47 
                 3 
                 2,048 
                 4,357 
                 0 
                 250,000 
                 1,674.66 
               
               
                 48 
                 4 
                 1,024 
                 5,041 
                 0 
                 250,000 
                 670.85 
               
               
                 49 
                 5 
                 1,024 
                 5,740 
                 0 
                 250,000 
                 585.72 
               
               
                 50 
                 6 
                 1,024 
                 6,463 
                 138 
                 250,000 
                 484.04 
               
               
                 51 
                 7 
                 1,024 
                 7,214 
                 890 
                 250,000 
                 355.73 
               
               
                 52 
                 8 
                 1,024 
                 7,996 
                 1,671 
                 250,000 
                 230.54 
               
               
                 53 
                 9 
                 1,024 
                 8,804 
                 2,480 
                 250,000 
                 119.89 
               
               
                 54 
                 10 
                 1,024 
                 9,633 
                 3,309 
                 250,000 
                 13.37 
               
               
                 55 
                 11 
                 1,024 
                 10,469 
                 4,777 
                 250,000 
                 (89.88) 
               
               
                 56 
                 12 
                 1,024 
                 11,279 
                 6,219 
                 250,000 
                 (207.41) 
               
               
                 57 
                 13 
                 1,024 
                 12,041 
                 7,614 
                 250,000 
                 (323.79) 
               
               
                 58 
                 14 
                 1,024 
                 12,750 
                 8,955 
                 250,000 
                 (394.73) 
               
               
                 59 
                 15 
                 1,024 
                 13,396 
                 10,233 
                 250,000 
                 (465.71) 
               
               
                 60 
                 16 
                 1,024 
                 13,929 
                 11,399 
                 250,000 
                 (568.73) 
               
               
                 61 
                 17 
                 1,024 
                 14,402 
                 12,505 
                 250,000 
                 (654.67) 
               
               
                 62 
                 18 
                 1,024 
                 14,804 
                 13,539 
                 250,000 
                 (735.86) 
               
               
                 63 
                 19 
                 1,024 
                 15,126 
                 14,494 
                 250,000 
                 (814.38) 
               
               
                 64 
                 20 
                 1,024 
                 15,356 
                 15,356 
                 250,000 
                 (872.58) 
               
               
                 65 
                 21 
                 1,024 
                 15,450 
                 15,450 
                 250,000 
                 (914.24) 
               
               
                 66 
                 22 
                 1,024 
                 15,382 
                 15,382 
                 250,000 
                 (941.12) 
               
               
                 67 
                 23 
                 1,024 
                 15,123 
                 15,123 
                 250,000 
                 (957.09) 
               
               
                 68 
                 24 
                 1,024 
                 14,541 
                 14,641 
                 250,000 
                 (956.37) 
               
               
                 69 
                 25 
                 1,024 
                 13,897 
                 13,897 
                 250,000 
                 (952.06) 
               
               
                 70 
                 26 
                 1,024 
                 12,851 
                 12,851 
                 250,000 
                 (1,107.57) 
               
               
                 71 
                 27 
                 1,024 
                 11,456 
                 11,456 
                 250,000 
                 (1,117.37 
               
               
                 72 
                 28 
                 1,024 
                 9,665 
                 9,665 
                 250,000 
                 (1,125.84) 
               
               
                 73 
                 29 
                 1,024 
                 7,418 
                 7,418 
                 250,000 
                 (1,130.21) 
               
               
                 74 
                 30 
                 1,024 
                 4,643 
                 4,643 
                 250,000 
                 (1,130.51) 
               
               
                 75 
                 31 
                 1,024 
                 1,251 
                 1,251 
                 250,000 
                 (1,119.09) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                 TABLE J4 
               
             
             
               
                   
               
               
                 Product Stress Tolerance - Calculation of IRR 
               
               
                 Premium Reduction in Years 4 and Later 
               
               
                 Company D 
               
             
          
           
               
                   
                 Du- 
                   
                   
                   
                   
                   
                   
               
               
                   
                 ra- 
                 Pre- 
               
               
                 Age 
                 tion 
                 mium 
                 AV 
                 CSV 
                 DB 
                 Cash Flow 
                 IRR 
               
               
                   
               
             
          
           
               
                 45 
                 1 
                 1,648 
                 1,387 
                 0 
                 250,000 
                 1,549.69 
                 6.823% 
               
               
                 46 
                 2 
                 1,648 
                 2,800 
                 0 
                 250,000 
                 1,427.63 
               
               
                 47 
                 3 
                 1,648 
                 4,243 
                 0 
                 250,000 
                 1,314.04 
               
               
                 48 
                 4 
                 824 
                 4,902 
                 0 
                 250,000 
                 499.70 
               
               
                 49 
                 5 
                 824 
                 5,572 
                 0 
                 250,000 
                 423.29 
               
               
                 50 
                 6 
                 824 
                 6,226 
                 0 
                 250,000 
                 335.25 
               
               
                 51 
                 7 
                 824 
                 6,892 
                 839 
                 250,000 
                 211.44 
               
               
                 52 
                 8 
                 824 
                 7,541 
                 1,848 
                 250,000 
                 85.87 
               
               
                 53 
                 9 
                 824 
                 8,172 
                 2,852 
                 250,000 
                 (23.57) 
               
               
                 54 
                 10 
                 824 
                 8,755 
                 3,822 
                 250,000 
                 (126.87) 
               
               
                 55 
                 11 
                 824 
                 9,227 
                 4,697 
                 250,000 
                 (205.22) 
               
               
                 56 
                 12 
                 824 
                 9,582 
                 5,469 
                 250,000 
                 (297.93) 
               
               
                 57 
                 13 
                 824 
                 9,961 
                 6,283 
                 250,000 
                 (394.13) 
               
               
                 58 
                 14 
                 824 
                 10,364 
                 7,139 
                 250,000 
                 (449.17) 
               
               
                 59 
                 15 
                 824 
                 10,795 
                 8,045 
                 250,000 
                 (508.42) 
               
               
                 60 
                 16 
                 824 
                 11,255 
                 9,000 
                 250,000 
                 (604.41) 
               
               
                 61 
                 17 
                 824 
                 11,745 
                 10,013 
                 250,000 
                 (686.39) 
               
               
                 62 
                 18 
                 824 
                 12,268 
                 11,081 
                 250,000 
                 (766.44) 
               
               
                 63 
                 19 
                 824 
                 12,826 
                 12,216 
                 250,000 
                 (846.49) 
               
               
                 64 
                 20 
                 824 
                 13,421 
                 13,421 
                 250,000 
                 (908.71) 
               
               
                 65 
                 21 
                 824 
                 13,998 
                 13,998 
                 250,000 
                 (956.02) 
               
               
                 66 
                 22 
                 824 
                 14,496 
                 14,496 
                 250,000 
                 (988.90) 
               
               
                 67 
                 23 
                 824 
                 14,970 
                 14,970 
                 250,000 
                 (1,012.28) 
               
               
                 68 
                 24 
                 824 
                 15,332 
                 15,332 
                 250,000 
                 (1,019.21) 
               
               
                 69 
                 25 
                 824 
                 15,573 
                 15,573 
                 250,000 
                 (1,022.99) 
               
               
                 70 
                 26 
                 824 
                 15,598 
                 15,598 
                 250,000 
                 (1,186.11) 
               
               
                 71 
                 27 
                 824 
                 15,423 
                 15,423 
                 250,000 
                 (1,203.39) 
               
               
                 72 
                 28 
                 824 
                 15,061 
                 15,061 
                 250,000 
                 (1,219.74) 
               
               
                 73 
                 29 
                 824 
                 14,469 
                 14,469 
                 250,000 
                 (1,232.19) 
               
               
                 74 
                 30 
                 824 
                 13,629 
                 13,629 
                 250,000 
                 (1,240.86) 
               
               
                 75 
                 31 
                 824 
                 12,463 
                 12,463 
                 250,000 
                 (1,237.78) 
               
               
                 76 
                 32 
                 824 
                 10,945 
                 10,945 
                 250,000 
                 (1,238.53) 
               
               
                 77 
                 33 
                 824 
                 9,043 
                 9,043 
                 250,000 
                 (1,244.89) 
               
               
                 78 
                 34 
                 824 
                 6,633 
                 6,633 
                 250,000 
                 (1,244.96) 
               
               
                 79 
                 35 
                 824 
                 3,670 
                 3,670 
                 250,000 
                 (1,239.95) 
               
               
                 80 
                 36 
                 824 
                 67 
                 67 
                 250,000 
                 (1,222.52) 
               
               
                   
               
             
          
         
       
     
     Management Performance 
     In order to set reasonable high and low points for this scoring driver, a universe of ten companies is examined, and the metrics for each one computed based on recent statutory filings. In this example, statutory filing as of Dec. 31, 2000 were examined. Where a company is a subsidiary of a larger life insurer, consolidated statutory numbers from the NAIC database are used. Management performance statistics for each of the companies A, B, C, and D are shown in Table K. 
                                                                                                                 TABLE K                   Management Performance Statistics            Management Performance   Company   Company   Company   Company   Company   Company   Company   Company   Company   Company           A   B   C   D   E   F   G   H   I   J                    5-year Average ROE   7.1%   11.0%   12.9%   13.6%   1.8%   26.9%   8.9%   18.1%   14.1%   23.3%       Ordinary Life Expenses/   166.3%   608.2%   342.4%   197.5%   206.1%   122.4%   73.7%   372.3%   495.5%   181.9%       Generally Recognized       Expense Table       5-year Average PEGG   4.2%   8.8%   −3.6%   118.1%   157.4%   6.2%   −16.5%   −3.8%   8.2%   −0.3%       5-year Assets CAGR   12.1%   25.5%   6.6%   23.4%   38.8%   8.3%   12.5%   9.5%   24.1%   10.9%       Maximum Earnings Deviation   366.5%   108.6%   44.2%   24.4%   162.9%   52.1%   48.4%   125.1%   62.9%   23.1%       from Geometric Path       Ordinary Life Expenses/   17.7%   22.7%   22.4%   14.4%   11.6%   6.5%   2.3%   15.1%   12.6%   6.6%       Ordinary Life Premiums       Ordinary Life Expenses/   3.6%   2.3%   2.9%   1.6%   9.5%   0.9%   1.1%   2.0%   1.6%   0.9%       Ordinary Life Reserves                    
Historical Credited Rates
 
     The high point is set at $6,150 and the low point at $5,800. Company D, being above the high point, receives a normalized score of 5. Historical credit rates are shown in Table L. 
                                                                       TABLE L                   Historical Credited Rates                Company   Company   Company   Company           A   B   C   D               1996   8.00%   8.30%   8.40%   8.50%       1997   7.50%   7.60%   7.80%   8.00%       1998   7.00%   6.90%   7.20%   7.50%       1999   6.50%   6.20%   6.60%   7.00%       2000   6.00%   5.50%   6.00%   6.50%            $1,000 Accumulated to 2001:                $6,098   $6,058   $6,123   $6,188                        
Company Service Quality
 
     Company service quality indicators are shown in Table M for the example companies A, B, C, and D. 
                                                                                 TABLE M                   Company Service Quality Indicators                Co.   Co.   Co.   Co.   Low   High           A   B   C   D   Score   Score                    Average Time to Offer   60   30   45   15   15   60       Telephone Service -   5.0   4.0   3.5   2.5       Composite Score:       Days/week CSRs available   5   5   5   5   5   5       Avg # of calls/day   30   40   50   60   30   60       per CSR       Hours/day customer service   8   9   9   10   8   10       available       800 # available (1 = Y,   1   1   1   1   1   1       0 = N)       Website Capabilities                               (1 = Y, 0 = N)       Website   1   1   1   1       Specific product   1   1   1   0       information available       Quote capabilities   0   0   0   0       Ability to apply online   0   0   0   0       Ability to access account   0   0   0   0       information       Ability to change address,   0   0   0   0       beneficiary       Application status   0   0   0   0       capabilities       Total   2   1   0   0   0   7       Standard Requests -                               days to process       Cash loans   5   4   5   3       Cash surrenders   6   6   5   4       Non-contestable death   5   5   4   3       claims       Customer correspondence   6   8   5   4       Average   5.5   5.75   4.75   3.5   3   5                    
Best&#39;s Rating
 
     Best&#39;s rating for the example companies A, B, C, and D are shown in Table N. 
                                                                 TABLE N                   Number of companies by Best Ratings                        Percentile   Score                    A++   46   11.3%   100.0%   5.0       A+   147   36.1%   88.7%   4.4       A   123   30.2%   52.6%   2.6       A−   52   12.8%   22.4%   1.1       B++   22   5.4%   9.6%   0.5       B+   15   3.7%   4.2%   0.2       E   2   0.5%   0.5%   0.0       Total   407               Company A A       Company B A++       Company C A       Company D A++            
PVAS Rating
 
     The PVAS rating is a weighted average of the normalized scores on each of the scoring drivers. This calculation is summarized in Table O. 
     
       
         
               
             
               
               
               
               
               
             
               
               
               
               
               
             
           
               
                 TABLE O 
               
             
             
               
                   
               
               
                 PVAS Calculation Summary 
               
             
          
           
               
                   
                 Company 
                 Company 
                 Company 
                 Company 
               
               
                   
                 A 
                 B 
                 C 
                 D 
               
               
                   
               
             
          
           
               
                 PVAS Rating (Out of 5 Points): 
                 1.8 
                 3.6 
                 2.5 
                 4.0 
               
               
                 I. Product Value for Money 
                 1.6 
                 3.7 
                 1.8 
                 4.8 
               
               
                 II. Product Stress Tolerance 
                 0.3 
                 3.9 
                 3.3 
                 1.6 
               
               
                 III. Management Performance 
                 1.9 
                 2.6 
                 2.2 
                 4.0 
               
               
                 IV. Product Crediting Rate History 
                 4.3 
                 3.7 
                 4.6 
                 5.0 
               
               
                 V. Company Service Quality 
                 2.4 
                 3.5 
                 2.9 
                 3.9 
               
               
                 VI. AM Best Rating 
                 2.6 
                 5.0 
                 2.6 
                 5.0 
               
               
                 I. Product Value for Money 
               
               
                 IRR - current assumptions, LIMRA 
                 1.4 
                 4.2 
                 1.7 
                 5.0 
               
               
                 lapses 
               
               
                 IRR - current assumptions, level lapses 
                 0.8 
                 3.8 
                 1.0 
                 4.6 
               
               
                 Planned Premium to Achieve Objective 
                 2.1 
                 3.0 
                 2.5 
                 4.7 
               
               
                 Product Flexibility 
                 4.0 
                 3.0 
                 3.0 
                 5.0 
               
               
                 Score 
                 1.6 
                 3.7 
                 1.8 
                 4.8 
               
               
                 II. Product Stress Tolerance 
               
               
                 Ratio of 20-year CSV for 
                 0.4 
                 3.6 
                 4.8 
                 0.9 
               
               
                 midpoint: current assumptions 
               
               
                 Years in Force at Midpoint Assumption 
                 0.5 
                 5.0 
                 2.0 
                 0.5 
               
               
                 IRR - current assumptions with 50% 
                 0.0 
                 3.5 
                 0.0 
                 5.0 
               
               
                 premium years 4+ 
               
               
                 Score 
                 0.3 
                 3.9 
                 3.3 
                 1.6 
               
               
                 III. Management Performance 
               
               
                 5-year Average ROE 
                 0.0 
                 2.5 
                 3.7 
                 4.1 
               
               
                 Ordinary Life Expenses/GRET 
                 3.7 
                 0.0 
                 0.0 
                 2.8 
               
               
                 5-year Average Premium Expense 
                 4.4 
                 5.0 
                 0.0 
                 5.0 
               
               
                 Growth Gap 
               
               
                 5-year Assets CAGR 
                 2.5 
                 5.0 
                 0.8 
                 5.0 
               
               
                 Maximum Earnings Deviation from 
                 3.7 
                 5.0 
                 5.0 
                 5.0 
               
               
                 Geometric Path 
               
               
                 Ordinary Life Expenses/Ordinary Life 
                 1.6 
                 0.1 
                 0.2 
                 2.5 
               
               
                 Premium 
               
               
                 Ordinary Life Expenses/Ordinary Life 
                 0.7 
                 2.8 
                 1.9 
                 4.0 
               
               
                 Reserves 
               
               
                 Score 
                 1.9 
                 2.6 
                 2.2 
                 4.0 
               
               
                 IV. Historical Credited Rates 
               
               
                 Score 
                 4.3 
                 3.7 
                 4.6 
                 5.0 
               
               
                 V. Company Service Quality 
               
               
                 Average time to offer 
                 2.0 
                 4.0 
                 3.0 
                 5.0 
               
               
                 Telephone service 
                 5.0 
                 4.0 
                 3.5 
                 2.5 
               
               
                 Website capabilities 
                 1.4 
                 1.4 
                 1.4 
                 0.7 
               
               
                 Response time for standard requests 
                 2.8 
                 2.7 
                 3.3 
                 4.1 
               
               
                 Score 
                 2.4 
                 3.5 
                 2.9 
                 3.9 
               
               
                 VI. AM Best Rating 
               
               
                 Score 
                 2.6 
                 5.0 
                 2.6 
                 5.0 
               
               
                   
               
             
          
         
       
     
     After a purchase decision is made, that information is transmitted back to the value appraisal system to become a part of the market intelligence database and to the “winning” carrier. The value appraisal system will also be able to transmit an on-line application for the selected product to the winning carrier. 
     It will be apparent to those skilled in the art that various modifications and variation can be made in the system for appraising a life insurance product of the present invention without departing from the spirit or scope of the invention. Thus, it is intended that the present invention cover the modifications and variations of this invention provided they come within the scope of the appended claims and their equivalents