Lafayette Simplified Issue Product Changes

[The Admiral]

I also suspect poor Mortality was the reason for raising rates. Many agents have used Lafayette for smokers because of the low rates. They also allowed for non-smoker rates cigar & pipe smokers, chewing tobacco, nicotine patch, gum, etc., unless this was changed in the last few years. Their focus has always been on other products and were satisfied with the several million dollars of final expense production per year being received.

In 2013 & 2014, we saw about a dozen carriers, in each of those years, make changes to rates, comp, underwriting, etc.. In 2014, we saw Forethought, CSI Life and ING(ReliaStar) exit the market. Both CSI and ING were only in the FE market for about a year.

Some carriers have the expertise and systems to manage the business to make a profit; many do not. Years ago, United American sent a memo to their agents stating they had to raise rates because of poor persistency. Their new rates back then were the highest in the industry. Does anyone really believe this change helped persistency?

 

[peteybear]

The risks these company's take are incredible. Throw in 150-160% total Fyc and 10% renewals plus poor persistency and it's tough to make money. Look at how 5 star has make so many changes in the last few yrs. Speaking of United american they reintroduced a Fe product 30% plus more expensive than than mkt rates. A person in the new business dept at trans recently told told me they process 500-800 apps a day which is near $100 mil a yr of premium .Thats up there with LH as the biggest Fe carrier. I assure you Trans will tighten underwriting as the claims role in from adverse selection.

 

[John Galt]

I've been using them for over 10 years and will definitely miss the low rates on the Protector plan.

Only they know the reason for the rate increase for sure. Could be bad claims experience. But I suspect that they have quite a bit of culture shock interacting with many FE agents and probably many FE policy holders too. They have been hinting that it was coming for a long time. It's not a knee jerk reaction.

The price leaders all eventually raise prices. Settlers was very low at one time. Oxfords rates were once the same as Christian Fidelity's are today. RNA was much lower. 5-Star just recently increased. ForeThought was priced low and eventually dropped out of the biz. Foresters raised premiums, tightened underwriting plus dropped fraternal benefits a couple of years ago. If I remember right, didn't even LH increase their premiums within the past few years? Not that LH was ever a price leader.

You just have to work with what is available currently and hope all your customers appreciate the low rates they got to lock in for life that aren't available anymore. Change always brings new opportunity.

Anyone want to place bets on what month Standard Life either tightens underwriting or raises rates? I'm just guessing but they have to be the next one.

I agree with everything but the part about SLAC, are they not already pretty strict on UW? Every app I have wrote is pretty restrictive.

 

[MAlife]

well that ends that..thanks for heads up on this.
looks like NT rates increased avg 17% and T rates increased avg 41%.

 

[jdeasy]

They never were a company for FE. So them exiting FE is not even a ripple in the FE lake.

 

[SPUR CITY]

They never were a company for FE. So them exiting FE is not even a ripple in the FE lake.

I couldn't agree more. No skin off my back.

 

[Rearden]

You all missed out - great paid-up plans at great rates.

Sold Lafayette more to the above-average FE buyer, especially those that hate the concept of lifetime payments.

 

[Newby]

You all missed out - great paid-up plans at great rates. Sold Lafayette more to the above-average FE buyer, especially those that hate the concept of lifetime payments.

You can still do the life pay at the higher face amounts than they want and go RPU in 10 years. But they have to be half way intelligent to understand.

 

[jdeasy]

You all missed out - great paid-up plans at great rates.

Sold Lafayette more to the above-average FE buyer, especially those that hate the concept of lifetime payments.

I didn't miss anything. RNA, Trans, Settlers and FBL have limited pay plans.

Mandatory POS interview with no decision at the end. That's just stupid stuff.

They one niche, MS. Sure will miss then for that.