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The Nature and Causes of Variation in Insurance Policy Yields: Whole Life and Universal Life


  • James M. Carson
  • Mark D. Forster


This study examines policy (Linton) yields of two popular forms of cash value life insurance (whole life and universal life) for the period 1988 to 1998. Several hypotheses and statements by professionals suggest that WL likely would dominate UL in terms of policy yield. However, results indicate that universal life policy yields were significantly higher than whole life policy yields for five-year and ten-year holding periods. In addition, the variation in policy yields is greater than that found in previous research. The analysis provides information on the nature, extent, and causes of variation in policy performance, both within and across policy type. The study’s findings are relevant to consumers, financial service professionals, insurers, and regulators.

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  • James M. Carson & Mark D. Forster, 2000. "The Nature and Causes of Variation in Insurance Policy Yields: Whole Life and Universal Life," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 23(1), pages 30-47.
  • Handle: RePEc:wri:journl:v:23:y:2000:i:1:p:30-47

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