I just received a Compulife update showing that AXA has discontinued their no-lapse UL product (as rumored earlier) - is this a sign of things to come from all carriers to decrease the amount of reserves they must hold? Or just one carrier making a change in product line? I think we will see more carriers taking a hard look at removing no-lapse guarantees, underwriting guidelines, and increasing rates. All designed to decrease reserves, increase profit margins, and not get stung by claims (hence many carriers dumbing-down or removing their table shave programs). Maybe a preferred is now a standard-plus or standard, a preferred plus now a preferred, etc. Anyone else have any thoughts?
AXA Drops No-lapse Guaranteed UL - Other Companies to Follow Suit?
- Thread starter dgoldenz
- Start date
Insurance Co mgmt isn't that hard... You take in premiums, have expenses, invest the rest for gain and income... operating on the spread... unless of course... investment income and asset stablilization is hard to come by. (like in today's mkt). Then it becomes extremely difficult to deliver quality products with long term promises, let alone guarantees.
The investment picture is turbulent today. So yes, it is a sign of the marketplace, and possibly what they see around the corner to come. There are some ins cos with latent financial problems, even though some in this industry deny such a thing exists.
The investment picture is turbulent today. So yes, it is a sign of the marketplace, and possibly what they see around the corner to come. There are some ins cos with latent financial problems, even though some in this industry deny such a thing exists.
Long term money, as SportsNut pointed out is an issue along with reserve requirements. Recent issues in the market has put everything topsy turvy. We saw the same thing in the 80's with the real estate bust.
Big name carriers promising high returns on retirement plans saw their portfolio take a dive. This led to liquidations with ultimately affected cash value life insurance plans.
This is a shake out. You may see other carriers following suit in the short run only to come back in a year or so, once the dust settles, with guaranteed UL products but at higher rates and lower cash accumulations.
Big name carriers promising high returns on retirement plans saw their portfolio take a dive. This led to liquidations with ultimately affected cash value life insurance plans.
This is a shake out. You may see other carriers following suit in the short run only to come back in a year or so, once the dust settles, with guaranteed UL products but at higher rates and lower cash accumulations.
- 915
So sell it at these rates while you can!
- 608
Yes, many carriers will be dropping secondary gaurantees. They also will be dropping ROP products and riders.
Drewrilla
Expert
I'd like to see the research behind this statement.
AXA made an initial move to remove the guarantees for new business sales, which by the way they have done in the past a few years ago to slow business while getting ready for a new product launch. I spoke with our regional AXA guy and he informed us that they will be re-introducing secondary guarantees (an age 90 guarantee product) within the next 6 months on a newly repriced product.
Everyone stop jumping to conclusions and wait out the storm. Eeesh
