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Special Market Update

Special Market Update

This is a special marketplace edition of our newsletter.  Make no mistake there is disruption and delay in our world due to what is going on.  It is however the lower interest rates causing rapid product changes, suspensions or elimination.  Below are some quick bullet points for insight to what is going on.  We are here and prepared to help you serve your client protection needs.  The world is still turning but it has certainly caused stress and pain.  Please make sure you download a copy of The Scary Times Manual to help you focus during these uncertain times:  Scary Times Success Manual
 
Life Insurance

  • Term – some carriers have increased rates.  One carrier is suspending 30- year term sales until they can reprice their product.  We suspect other longer duration products will be affected. 
  • Universal Life/Indexed UL – fixed rates, caps & participation rates are all being reduced.
  • Guaranteed Universal Life – some carriers have increased rates; we expect some may discontinue product lines. Some carriers are eliminating or putting premium limits on single pay & advanced pay scenarios.
  • Some parts of the country DO NOT have paramed services available
  • Consider Accelerated Underwriting – for healthy clients, up to $3Mill of coverage is possible with NO Exam, blood or urine.
  • Consider e-applications – several carriers are expanding their availability of products.
  • Expect delays – many carriers have their employees working from home.
  • Some carriers are moving to digital e-policy delivery v. paper policies.
  • There is no doubt if you need life insurance it is best to move quickly

 
Long-Term Care Insurance

  • Most of the changes we’ve seen so far are in the hybrid space.  Prices are increasing, maximum issue ages are changing, and certain designs/features are being restricted or discontinued.        
  • Underwriting hasn’t been affected much since most carriers only require a phone interview.
  • Some carriers are now willing to perform cognitive tests via a phone interview where face-to-face interviews are typically required
  • Long-term care is about asset protection, asset leverage and dignity.  For those with cash and fear of the market, perhaps this makes more sense than ever?

Annuities

  • Everything is being lowered – fixed rates, guaranteed minimums, caps & participation rates.
  • Some longer duration products and those with bonuses have been suspended.
  • Immediate annuities at some carriers have been suspended.
  • It is estimated you will need 15% more premium for the same income you would have paid just a few months ago for an immediate annuity.
  • Fixed indexed annuities are likely an even better alternative than before, for CD alternative and some bond ladder situations.  The more conservative your client, the more that is true. 

Disability Insurance

  • No reprices mentioned to date.
  • Some carriers have increased their non-medical underwriting limits up to $10,000/mo.  
  • Disability insurance is often overlooked and minimized by many.  Since assets are lower you may want your income safety net to be higher than before.  This is especially true for those who have a spouse out of work.

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