TIAA to stop selling life insurance by end of 2019

[Insurance Forums Staff]

Insurance Forums Staff submitted a new article

TIAA to stop selling life insurance by end of 2019

Move seen as bad news for RIAs, but company memo says the firm’s much bigger annuity business will be unaffected by the strategic decision.

Continue reading the Original Article.

 

[Robert Barney]

Thanks for the post, first I had heard about it.

 

[walthamny]

They had a very low pricing strategy for their UL. No wonder it did not work.

 

[Allen Trent]

I love the part of the article that says agents in NY were going to try to be fee only to satisfy the best interest requirement. So, a 1% AUM charge to the cash value each year for 30 to 70 years would be in the best interest of the consumer instead of the rep being paid a 1x 50-100% commission on the 1st year annual premium & a couple % renewals on the premium? Me thinky a 1% AUM charge on the CV might provide a much higher total revenue to the rep over the decades. But, who knows, maybe the total charges, loads, COI would be better if the scary agent hadnt made a commission.

I have zero issue with fee based model, but the assumption it is somehow magically always best interest to consumer is very naive. I would much rather pay a 1x 2% load on my $1M IRA rollover as a consumer than to get charged 1% every year for 30-50 years.

 

[VolAgent]

Hopefully someone can clear this up, I thought only life insurers could issue annuities? So how is TIAA going to continue issuing annuities if they are no longer issuing life insurance?

 

[Allen Trent]

Hopefully someone can clear this up, I thought only life insurers could issue annuities? So how is TIAA going to continue issuing annuities if they are no longer issuing life insurance?

Jackson National quit selling life insurance about 5-7 years ago. I believe Hartford quit issuing life policies as did a couple other large life insurers that decided they couldn't price products in this low interest rate environment to make them a profit. Apparently more profit & less risk to,issue new annuities than life insurance

 

[Robert Barney]

Hopefully someone can clear this up, I thought only life insurers could issue annuities? So how is TIAA going to continue issuing annuities if they are no longer issuing life insurance?

It does not mean you cease to be a life insurance company just because you don't issue new life insurance policies. As others have pointed out, there are lots of life insurers which continue to operate, but do not issue new policies.

 

[VolAgent]

It does not mean you cease to be a life insurance company just because you don't issue new life insurance policies. As others have pointed out, there are lots of life insurers which continue to operate, but do not issue new policies.

Does it? Seems one of the requirements of being something is that you continue to do something. It is hard to say you are a life insurance company when you no longer issue life insurance policies.

I wonder how long until a regulator decides this merits more investigation.

 

[Allen Trent]

Does it? Seems one of the requirements of being something is that you continue to do something. It is hard to say you are a life insurance company when you no longer issue life insurance policies.

I wonder how long until a regulator decides this merits more investigation.

Annuities are by definition & insurance regulation a life insurance product. Thus, an agent with only a life insurance license can sell them Even If they never sell life insurance policies like term, WL or UL

 

[pfg1]

American Equity has never sold life insurance, only annuities.