GLOBAL LIFE UNDERWRITING

METHODOLOGY

Investors Deserve CARAT™ based LERs.  GLU LERs are Consistent, Accurate, Reliable, Accountable, and Transparent.

Provide Useful Information to Investors and Sellers:  GLU LERs provide you with more than a number (LE); GLU clients receive a summary of the data reviewed and a description of any key data related to the RR classification.  Where relevant, prior, current or possible future changes to the insured’s health and classification are identified.

Based on Standardized Mortality Tables:  All LEs are calculated based on the 2008 VBT Relative Risk Tables or the Social Security Administration Mortality Tables.  LEs are calculated using the standard qX actuarial formula on a monthly basis.

All Medical Underwriting Based on UCS:  The Underwriting Criteria Score (UCS) was developed by the Society of Actuaries to standardize the classification of policies for the 2008 VBT RR tables.  GLU uses Swiss Re underwriting (debit/credit) guidelines to consistently classify and rate medical risk factors which are converted to UCS values.

Based on Insured’s Actual Age:  LEs are accurate to the insured’s actual (month) age at the date of the Certificate (no more Age Nearest Birthday or Age Last Birthday).

Based on Issue Date Duration or Last Medical Underwriting:  Standard LEs are based on duration from the policy’s issue date or the date of the last GLU-based medical underwriting.  Medically Underwritten LERs reset the duration period to 1.

Indicative LERs:  To assist life agents in their sales process, GLU will issue Indicative LERs based on the relative risk class selected by the life agent.  These Indicative LERs are not based on issued policies and are designed exclusively for life agents and their clients for policy evaluation purposes and are expressly not to be relied on by investors.

THE GOLD STANDARD

2008 VBT mortality tables are based on the most comprehensive study of fully underwritten life insurance policies:

■        Policies with $7.4 trillion in death benefits

■        695,000 deaths over a 3 year study period

■        All policies were fully underwritten 

¨    Primary and Relative Risk (RR) data excludes limited underwritten and substandard or impaired risk policies 

■        Policies were allocated to relative risk tables based on their initial Underwriting Criteria Score (UCS) 

¨    10 Non-smoking relative risk tables for Males & Females

¨    4 Smoking relative risk tables for Males & Females

■        UCS scoring was standardized over 32 participating life insurance companies