Target Premium
The universal life premium level recommended by the insurer to keep the policy in force through maturity, a benchmark rather than a required payment.
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A universal life policy states a 'guaranteed maximum premium.' What does that guarantee mean?
It is the highest premium the insurer can ever charge to keep the policy in force, regardless of interest rates or mortality changes. — Universal life policies are interest-sensitive: the premium needed to keep coverage in force can change as credited interest and mortality charges change. The guaranteed maximum premium is a contractual cap — the insurer guarantees that if the policyowner pays no more than this amount, the policy will remain in force even under the worst permitted assumptions (guaranteed interest and maximum cost of insurance). The initial or target premium is the amount the insurer estimates is needed under current assumptions, which is normally lower than the guaranteed maximum.
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