Voya to exit individual life sales at end of the year

Voya Financial, Inc. announced on Tuesday, Oct. 30, that it will stop selling new individual life insurance at the end of the year.

The announcement came as part of the company’s third quarter earnings report, which revealed the company, spun out of ING in 2013, had concluded the strategic review of its individual life business.

The result: Voya will cease all new sales of individual life insurance on Dec. 31, 2018, and will keep its existing block of life insurance policies and pay out claims as they come due.

“Following the sale of substantially all of our individual annuities businesses earlier this year, we conducted a thorough review of our Individual Life business to determine the best path forward. We carefully considered our broader, go-forward strategy of largely focusing on the workplace and institutional clients, analyzed the options available to us, and concluded that ceasing new sales aligns with our plans to focus on our higher-growth, higher-return, capital-light businesses: Retirement, Investment Management and Employee Benefits,” said Voya Financial Chairman and CEO Rodney O. Martin.

“Further, continuing to own the in-force block will benefit shareholders in that it will provide earnings and capital diversification and generate higher free cash flows. Specifically, we expect our Individual Life business to increase free cash flow conversion to 70% to 80% and generate meaningful free cash flow of at least $1 billion over the next five to six years.

“Voya will continue to be good stewards of shareholder capital. As we have over the past several years, we will continue to explore and pursue opportunities to maximize the value of our in-force life insurance business,” Martin said.

For the third quarter, Voya’s total individual life sales totaled $20 million, up from $18 million. The unit has contributed about 20% of operating earnings in recent quarters. As recently as 2012, Voya’s annual individual life insurance sales reached $250 million.

Voya joins MetLife in recently withdrawing from individual life insurance sales. MetLife spun off its U.S. retail life business into Brighthouse Financial in 2017.

21 COMMENTS

  1. bmarsh

    I have a ROP term with Voya at perferred best, if I don’t convert it now, will I lose my chance forever?

    No. But your choices to convert to are likely to become more and more limited as time goes on. I would convert what you can now if feasible.

  2. scagnt83

    No. But your choices to convert to are likely to become more and more limited as time goes on. I would convert what you can now if feasible.

    Thanks,

    Do they usually keep 1 product open for conversations? And close everything for new business?

  3. bmarsh

    Thanks,

    Do they usually keep 1 product open for conversations? And close everything for new business?

    It depends on the carrier. But that is exactly what Jackson National did. I know a few others have done similar things.

    Jackson now just has a Level DB non-participating Whole Life policy to convert to. No cash value to speak of. After about 30 years the client would have paid as much in Premium as the DB was. Basically a FE policy.

    Thats no guarantee the same will happen with Voya. But what incentive do they have to keep decent UL or WL products on the books if they no longer sell those products? Its a HUGE expense to maintain them. Conversions alone are not going to create profits on that expense.

    Im not saying its morally just to the clients… Im just saying thats business. It is what it is.

  4. scagnt83

    It depends on the carrier. But that is exactly what Jackson National did. I know a few others have done similar things.

    Jackson now just has a Level DB non-participating Whole Life policy to convert to. No cash value to speak of. After about 30 years the client would have paid as much in Premium as the DB was. Basically a FE policy.

    Thats no guarantee the same will happen with Voya. But what incentive do they have to keep decent UL or WL products on the books if they no longer sell those products? Its a HUGE expense to maintain them. Conversions alone are not going to create profits on that expense.

    Im not saying its morally just to the clients… Im just saying thats business. It is what it is.

    Agreed.

    I have not looked into the JNL options recently. They also no longer pay comp on the conversion.

    Most companies will have horrible opinions. Genworth has a poorly performing UL. CNA Valley Forge has a very high cost Non Par WL.

    The companies understand adverse selection.

  5. bmarsh

    I have a ROP term with Voya at perferred best, if I don’t convert it now, will I lose my chance forever?

    If possible I would replace it. They are closing the life block because it is not profitable. Once they close it I would not be surprised if they raised COI in the future on blocks of their life business.

  6. WinoBlues

    I have not looked into the JNL options recently. They also no longer pay comp on the conversion.

    Oh yeah! I forgot to add the best part !!!

    Fckn soul-less company, they try to get me to sell their Fixed Annuities… I always remind them of how they screwed agents and clients on the life side… NO THANKS!

  7. bmarsh

    Thanks,

    Do they usually keep 1 product open for conversations? And close everything for new business?

    If you are healthy, compare your other options before you convert. Some term companies have horrible conversion products and should only be used if you are uninsurable for a new underwritten policy elsewhere.

  8. DWPCL

    If possible I would replace it. They are closing the life block because it is not profitable. Once they close it I would not be surprised if they raised COI in the future on blocks of their life business.

    That would be true of UL based products, but how would they raise guaranteed level term or ROP?

  9. bmarsh

    Thanks,

    Do they usually keep 1 product open for conversations? And close everything for new business?

    I would think they would have as they have contracts out there to fulfill. The choices may not be there but something has to be if their term contracts allow for conversions.

    I just did one with a term conversion to IUL they were a PITA to work with. Took 4 months for the conversion to be completed. Just got paid for something that should have paid me in May

  10. bmarsh

    Thanks,

    Do they usually keep 1 product open for conversations? And close everything for new business?

    It would depend upon the exact language of the conversion clause. Odds are they will have something available until the last one expires. That said, no one said it had to particularly good or attractive. As SCAgent83 said, if you're going to convert, better do it now than later.

  11. scagnt83

    If a tree falls in the forest and nothing hears it, did it even make a sound?

    Voya has been on the path to obscurity even before the insane name change to Voya… but especially after.

    “The story of the name is it's your voyage or journey to and through retirement”

    :twitchy:

  12. KRobby

    “The story of the name is it's your voyage or journey to and through retirement”

    :twitchy:

    Someone got paid way too much money to think of that.

    If they had put in more effort on improving their products and financial ratings they would still be a major player in the market.

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