Term Life Insurance Lowdown

Residents of Columbia can now enjoy Free Life Insurance program

A national philanthropic program from Massachusetts Mutual Life Insurance Company will now enable the working residents of Columbia to have access to free life insurance. This program is called LifeBridge(SM) and will issue 10-year term life insurance policies to working parents. This is being done so that the education of their children is taken care of in the event of their sudden demise.

The policies are valued at $50,000 and are issued to a trust on the life of the qualifying parents or legal guardians. All the premiums for the policy are paid by MassMutual and no fees etc are payable by the insured. The company is taking this philanthropic step in order to ensure that every child has access to education even if the working member of the family is no more. The program was started in 2002. Since then the company had provided more than 5,600 10 year tem life insurance policies. These policies represent more than $280 million in free life insurance coverage. PR newswire reports:

Each LifeBridge policy has a 10-year policy term. If the insured parent or legal guardian dies during that time, the $50,000 life insurance benefit will be applied solely toward the education of the children.

New Term Life Insurance Products from Principal Financial Group

The Principal Financial Group recently announced the extension of its line of products. It will now be offering 15 and 30 year term products as well. Apart from this, the product line will have an enhanced conversion provision to age 70. There will also now be a super standard risk class. These new features have been specially created for 2006 and beyond.

This product extension not only gives the company a wider range of offerings but also helps it to attain the image of being more affordable and competitive in its underwriting. The company feels that the products are designed to be more flexible in order to meet the needs of more and more people. This will also help the marketers and financial experts to do their job well. They will now be able to guide their clients on the subject of life insurance in a much better way. Trading Markets reports:

The company said the new principal term line of life insurance products offers lower cost and more flexible options for life insurance marketers and financial professionals to help their clients protect their assets for the unexpected.

Now health and term life insurance for Greatwide drivers and owner operators

Greatwide has recently launched an insurance drive exclusively for its drivers and owner-operators. This announcement was made at the Great American Trucking Show in Dallas. Transportation giant Greatwide Logistics Services realized that the truck drivers and owner operators are a neglected lot when it comes to insurance. Most insurance companies do not regard them as great targets. This perhaps due to their on-the-road lifestyle and occasional poor eating habits. Therefore the insurance plans that most of these people end up getting are either budget busters or piecemeal. This is therefore being seen as one of the key reasons why the truckers are leaving their driving profession.

The medical insurance plan includes preventive and supplemental health care benefits along with dental insurance. A 10-year term life insurance and disability income protection is also a direct benefit. The plan offered by Greatwide is immediately available in 19 states to all its drivers and owner operators. Etrucker reports:

In addition to the health care portion, Greatwide, through MetLife, will offer legal counseling, home and personal auto insurance, pet insurance, a Preferred Savings Plan and critical illness insurance. These benefits will be rolled out over a period of months, Newell said.

Now get your premiums back if you survive the term of your term life insurance!

American General now has a policy that promises to pay you even if you survive the complete tenure of your term life insurance. Therefore what it offers is the deat benefit for the duration of the selected term (e.g., 15, 20 or 30 years). It also promises to return the amount equal to the premiums that you have paid when the term ends and if you are still living and if you have kept the policy in force. Generally the cost for taking this policy would be higher than an ordinary term insurance.

Other factors like age, health, medical history etc continue to influence the premium amount. The company claims that the reason that not very many people opt for this is simply because they have really not heard of it. At most times, people are also looking for affordable policies that do not cause much drain on the pocket.
Read more on this on the American General Life website.

Wells Fargo requests US Labor Department to allow funding employee benefits through it’s captive

San Francisco-based financial services industry giant Wells Fargo & Co has recently asked U.S. Labor Department for approval to fund employee benefits through its captive insurance company. The company wants to use Superior Guaranty Insurance Co. to reinsure group life and long-term disability policies. Superior Guaranty is a 16 year old Vermont Captive.

The US Labor Depart has earlier this year received a similar request from consumer food products manufacturer H.J. Heinz Co. The company had requested for approval to fund group term insurance policies written by Minnesota Life. Though initial approval on the request was given some months back, the final approval is expected to come sometime in the month of September. This year also saw pharmaceutical manufacturer AstraZeneca receiving a go ahead on the request of funding benefits through AstraZeneca’s Vermont captive. Business Insurance reports:

Wells Fargo, which has more than $500 billion in assets, now uses Superior Guaranty to fund a wide variety of corporate property/casualty risks. Last year, according to a filing with the Labor Department, Superior Guaranty generated more than $57 million in premiums, making it one of Vermont’s larger single-parent captives 

New Term Life Insurance products from The Principal Financial Group

With the view to offer affordable products with competitive underwriting, The Principal Financial Group has recently announced some critical changes in their Term Life Insurance Products. The Term Life Insurance products now include 15 and 30 year term products as well. There is also an enhanced conversion provision to age 70 along with a new super standard risk class. The low cost flexible options now made available will help life insurance marketers and financial professionals to help protect the assets of their clients and keep them prepared for the unexpected as well.

With the introduction of two new term products, the total number of options available to people opting for term life insurance goes up to five. The different products now available are – 10 Year, 15 Year, 20 Year and 30 Year Term products as well as Annually Renewable Term (ART). The company also has a package that can help people to identify their needs and take informed decisions. The program is called ‘From here to Security’ and includes step-by-step guides and interactive calculators to enable people to understand and assess individual financial protection needs while evaluating their coverage options. Business Wire reports:

"The new Principal Term line of life insurance products offers lower cost and more flexible options for life insurance marketers and financial professionals to help their clients protect their assets for the unexpected," said Deanna Strable, senior vice president of Individual Life and Specialty Benefits, Principal Financial Group.

Insurer Asked to Pay Up

An investigation into the activities of the American-Amicable Life Insurance Co. has concluded with the insurer being asked to settle $70 million in cash refunds and policy benefits to around 92,000 consumers in the U.S. military. The company has been found guilty of improper sales of insurance and investment products, according to the 20-month probe conducted jointly by insurance regulators in Texas and Georgia and the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

American-Amiable and its sister concerns were accused of breaching insurance and consumer protection statutes when they sold term life policies termed “Wealth Builder” or “Horizon Life” as investment products to military personnel. Almost all the soldiers who bought insurance from the insurer already had an adequate low-cost life insurance policy for $250,000, a sum that was partially subsidized by the federal government.

As a result of this violation and the subsequent ruling, American-Amicable has been banned from U.S. military bases for a period of five years. It is also barred from contacting military personnel for solicitation or sales purposes.

The companies deny violating any state insurance or consumer protection laws.

Insurer Slashes Term-Life Rates

Based on research that showed that more than 75 percent of New Zealanders are struggling under the burden of heavy debts and underinsurance, the American International Assurance New Zealand (AIA) has decided that reducing its term life rates would be the best way to corner a significant piece of the country’s insurance market.

The 2005 AIA LifeMatters Survey revealed the following pertinent facts:

• People under 35 did not buy insurance because of the lack of funds.
• Families with more children tend to buy more insurance.
• More than 50 percent of the country’s residents do not have any form of insurance - life, medical, income protection or critical illness. Of those that do, only 37 percent have basic life cover, 33 percent are insured for medical expenses, 13 percent have income protection cover, and 9 percent have critical illness insurance.
• Only about 25 percent of those who are insured are confident that their cover is enough to sustain their families and/or dependants in the event of accidental or sudden calamities.
• More than 40 percent of New Zealanders would not be able to carry on normal lives for more than three months in case they were not able to earn a living. 

Accordingly, the insurer has cut back on rates by as much as 19 percent for three of its key customer groups:

• Active, consumer-focused trendsetters below 35 will benefit from an 18 percent reduction in term life rates.
• Families with young children will be allowed a reduction of up to 14 percent for 40-year-old fathers who do not smoke and a maximum of 18 percent for mothers of the same age.
• Business owners and professionals over 45 will get a reduction of 5 percent for sums above $500,000. The degree of risk in each case will decide the reduction percentage for this group.

Resolution Buys Out Abbey National

Abbey National’s life insurance businesses are being snapped up the UK-based insurance firm Resolution, according to statements issued to the London Stock Exchange. The British bank owned by Spanish contemporary Banco Santander Central Hispano (SCH) is selling its life insurance activities that are valued at £3.6 billion sterling, and include Scottish Mutual Assurance, Scottish Provident Limited and Abbey National Life, as well as two offshore life companies, Scottish Mutual International and Scottish Provident International Life Assurance Limited. RTE reports:

The acquisitions will be funded partly with a £1.54-billion rights issue. Some 2,000 Abbey employees would transfer to Resolution as part of the deal. Meanwhile, Resolution has signed long-term distribution agreements to provide Abbey with Abbey-branded and Scottish Provident-branded life and pensions products.

Major Drop in Premium Rates of Policies Expected

As reported by Insurance Information Institute, the premium rates for insurance are expected to drop by 3 per cent in 2006. This comes as a result of severe competition in the market. Another reason cited for the cut down of prices is the lower mortality of people. Businessherald.com reports:

You can now lower down your premium to a major extent by quitting smoking, eating right, and exercising. If you are young, think of buying a term life insurance, which has no cash value. 

Term Life Insurance Cited As One Of The Hottest Products In The Latest Fitch Ratings

Fitch Ratings today released its annual 2005 Review and 2006 Outlook for the U.S. insurance industry. As per the ratings, term life insurance is one of the hottest products in the life industry. A product like term life insurance can create reserving and capital changes for insurers which can be addressed by scale, said Julie Burke, managing director, Fitch Ratings. Businesswire.com reports:

The recent trends and developments have further highlighted the need for the scale in the life industry. Also, franchise, size, scale, and diversity are seen as a means of competitive advantage for life insurers.

Term Life Insurance Rates Expected To Drop by Another 3 Percent in 2006

According to the Insurance Information Institute, term life insurance rates are expected to drop by another 3 percent in 2006. The rates have already been falling sharply. In the recent past consumers have had a remarkable opportunity to refinance their home mortgage because of low interest rates. But the opportunity is fading slowly fading away and the consumers need to refinance their term life insurance. Courant.com reports:

According to the estimation of AccuQuote.com, an online rate comparison service, a policy that costed $1,300 in the year 1994 will cost just $641 in the coming year. Bryon Udell, founder and chief executive of AccuQuote says “It's been a remarkable drop". People having policies that started before 1999 are going to benefit hugely.

Jefferson Pilot Financial introduces Paycheck Plus

Jefferson Pilot Financial, one of the nation’s leading providers of universal and variable universal life insurance, fixed annuities and employee benefits, Omaha, NE has announced the introduction of “Paycheck Plus”. Term life insurance is covered under this paycheck plus at an economic group rate. Term life insurance covers the event of untimely death. If an accident results in loss of life, the AD&D benefit will be paid to the beneficiary in addition to the term life benefit. Paypershop.cm reports:

The Paycheck Plus package is underwritten by Jefferson Pilot Financial Insurance Company, one of the nation’s top group insurance providers. Paycheck plus is a comprehensive package of voluntary income protection benefits that provides four lines of coverage within a single group rate.

China Life Insurance Increases Rates for Term Life Product

China Life Insurance Co. has reportedly increased the prices of two categories of insurance products prior to the release of the new life table by China Insurance Regulatory Commission, the China’s insurance regulatory body. China Life is to increase the premium rate on Kangning Term by 30% before December 10 2005.

Life table, premium rate and interest rate are three major factors that influence price decision. The implementation of the new life table will have an effect on pricing for annuity, term life insurance and whole life insurance.

Kanetix Launches New Term Life Insurance Quote Service

Kanetix, Canada's leading insurance marketplace, recently launched a new term life insurance quote service, with standard and preferred rates highlighted for insurance shoppers. The quotes are reportedly in an easy-to-read and comparables format.

Available on quotes for coverage of $250,000 or more, preferred rates can result in saving of up to 30% off the standard rate. The company has outlined that close to 50% of the people applying for life insurance coverage through the portal are likely to benefit from some savings. This piece of statistics is reportedly based on past experience of the portal. The portal would allow shoppers to review the price range offered and make an informed choice. insurance-canada reports:

Kanetix believes in providing easy-to-use and informative online tools for consumers to shop for their insurance quotes," said Gregory Ellis, co-founder of kanetix. "By showing the preferred and standard rate life insurance quotes together instantly, consumers can easily see which companies offer the best standard rates and the best preferred rates. Since they are often not the same company, consumers can, at a glance, make an informed choice about which insurer will offer them the most affordable coverage.

Term Life Insurance Rates Could Plummet

According to the Insurance Information Institute, a New York-based not-for-profit organization backed by insurance companies, the price of term life insurance policies is expected to decline by about 3 percent during 2006. The expected drop in price is due to competition and also the fact that life expectancy has improved. iii reports:

The institute estimated that the annual premium for a 40-year-old male buying a $500,000 term policy in 2006 is $641 as long as he qualifies as a standard risk. Rates are lower for women, who, according to the insurance industry, live longer.

Impact of Proposed Tax Reforms

The proposed tax reform bill, which is speculated to do away with many of the tax sops of life insurance, is likely to have a considerable impact on the insurance sector. However, the term life insurance segment is expected to benefit if such reforms are rolled out.

Leading industry organizations have issued a joint statement forewarning policymakers against tampering with the investment aspects of life insurance products. The potential impact of such reforms could be drop in the investment levels - with people only opting for term life insurance to retain coverage.

Read More: Proposed Tax Reforms