Hi, I just wanted to check my understanding of contract boundaries on UL business and the interaction of charges. 1. Is it the case that past the contract boundary we can still take credit for all future charges? 2. Is there any restriction on the point to which we can take credit for charges? Or is it in line with the death/maturity/surrender assumptions in the projection? Thanks in advance, Clare
Hi - this is a tricky question! Since the Core Reading doesn't go into this idea further (and in reality it is rather messy) I wouldn't worry too much about the details here. It will very much depend on the precise policy wording about the rights and obligations of the policyholders and insurer. If it is a regular premium product but effectively the premiums are recurrent single premiums, then the contract boundary would prevent future premiums from being considered, so charges in relation to those future premiums would not be included. In terms of future charges on {premiums paid up to the contract boundary}, then this could depend on the extent to which those charges are fixed or reviewable and, if reviewable, how reviewable. I'm hoping that some forum members might be able to give some examples from their own products?
