Rate basis
We calculate the rate basis using:
- current mortality and expense assumptions, and
- current interest rates.
Rates change daily
We review and may change the rate basis each day - typically because interest rates change.
- The income shown on your illustration is valid for the current day and the next 2 business days. Therefore the rate basis on the illustration is guaranteed until midnight of the rate guarantee date indicated on page 1 of the illustration.
- For example: if the illustration is done on Monday, the rate would be valid and guaranteed until midnight on Wednesday. If the illustration is done on Friday, Saturday or Sunday, the rate would be valid and guaranteed until midnight on Tuesday.
- This longer quote period gives you more time for your sales discussion with your client.
Holding the rate basis
- To lock-in the rate that's in effect on your illustration, you must confirm the sale with us before midnight eastern time on the rate guarantee date indicated on page 1 of the illustration.
- Confirming your sale means you can hold the rate for your client for 45 calendar days.
- This guarantees the rate basis only, not the amount of the income. Income can change based on a number of factors including the final amount of premium received, the actual purchase date we receive all premium, forms, etc.
- To get the held rate basis, we must receive all required forms and premiums in our office within 45 days of the date the sale is confirmed. After this time, we'll prepare another illustration, using the rates in effect at that time.
