Redetermination Provision

Provision found in current assumption whole life insurance policies under which the insurance company retains the contractual right to recalculate the premium (after a minimum period of time that the policy has been in force). However, the company guarantees that, at the least, a minimum interest rate will be credited to the cash value and, at the most, a maximum mortality charge will be subtracted. The resultant new premium may be greater than or less than the original premium. If the new premium is greater than the original premium, the policy owner may pay this greater premium, thereby retaining the original death benefit under the policy, or the policy owner may still pay the original premium, but the new death benefit will be lower than it was originally. On the other hand, if the new premium is less than the original premium, the policy owner may pay this lesser premium, thereby retaining the original death benefit under the policy, or the policy owner may still pay the original premium with the death benefit becoming greater than it was originally, or the difference in the new premium and the original premium can be added to the policy's cash value.