What is the minimum actuarial value that must be included in a delivered life insurance policy in Maryland?

In Maryland, the minimum actuarial value required in a delivered life insurance policy is established to ensure that policyholders receive a certain level of benefits relative to the premiums they pay. The minimum actuarial value of 70% indicates that, on average, the insurer must pay out at least 70 cents in benefits for every dollar collected in premiums. This standard helps protect consumers by ensuring they receive a fair return on their investment in life insurance policies.

This requirement promotes transparency and trust in the insurance market, as policyholders can rely on receiving a substantial benefit from their policies. Actuarial values below this threshold would not adequately safeguard the interests of insured individuals and could result in policies providing insufficient benefits when compared to the premiums paid. Therefore, the establishment of 70% as the minimum actuarial value reflects a regulatory commitment to consumer protection in life insurance coverage in Maryland.