No Lapse Guarantee is supposed to be the most straightforward permanent life insurance product available. The story is simple – pay a premium, get a death benefit. But that simple sheen belies complex underlying pricing structures dubiously called “Shadow Accounts.” Shadow Accounts have some clear benefits. They allow NLG products to operate similarly to other flexible premium products without requiring liquid, accessible cash value in any given year. Shadow Accounts allow carriers to more precisely price the product across lots of different funding patterns. Shadow Accounts also gave carriers leeway to follow the letter, but not the spirit, of the Actuarial Guideline 38 reserving regime applied to NLG products as outlined in The NLG Reserving Debate. And, as it turns out, Shadow Accounts injected quite a bit of risk into NLG that virtually no one in the field, including myself, knew existed.