LIMRA: WL Drives Life Insurance Up 3% in 1Q

WINDSOR, Conn., May 29, 2012 —Total individual life insurance premium grew three percent in the first quarter of 2012 compared to prior year. Overall policy count rose five percent in the first quarter of 2012.
“The biggest driver behind both total premium and policy count growth continues to be whole life,” said Ashley Durham, senior analyst, LIMRA product research. “We saw growth in whole life sales across the industry, including three quarters of our survey’s participants, and all but one of the dominant top twenty. It remains very attractive to consumers looking for security of premium and cash-value guarantees along with lifetime coverage.”
In the first quarter, whole WL premium increased 10 percent. WL policy count improved six percent. Half of all the individual life insurance policies issued in the first quarter were WL products.
 Measuring annualized premium, WL market share reached 32 percent in the first quarter — just seven percentage points lower than universal life (UL), which has held the lion’s share of premium sales since 2003. (At its peak in 2007, UL market share was 20 percentage points higher than WL.)
 Total UL premium was flat in the first quarter. Policy count grew five percent, representing the 12th consecutive quarter of growth in policy count for UL.

Lifetime-guarantee UL premium fell 12 percent in the first quarter of 2012. This product’s market share has been declining over the past few years as companies have had to take steps to mitigate the poor investment environment, and while they still represent the largest portion of overall UL premium, its market share is down to about 35 percent.
Indexed UL (IUL) jumped 22 percent in the first quarter and IUL policy count grew 41 percent. Companies continue to introduce IUL, and these sales represent more than 25 percent of all UL sold in the first quarter.

Variable UL (VUL) premium declined one percent in the first quarter. VUL policy count dropped nine percent. Just under a quarter of VUL writers were able to increase their premium sales over first quarter 2011.

Term life insurance sales experienced some positive growth in the first quarter of 2012. New term life premium grew by one percent in the first quarter. According to LIMRA’s sales survey, over half of the writers brought in more new term premium than they had during the first quarter of 2011, including 9 of the top 10 writers. Term policy count grew four percent in the first quarter; over half of companies surveyed had issued more policies, including 9 of the top 10 companies.
View the latest data table on U.S. life insurance sales trends. For more statistics, visit the newly updated Data Bank.

Steel Retirees Offered Deeply Discounted Health Insurance

June 08--Up to 45,000 steel-industry retirees whose health insurance benefits were shredded by their bankrupt former employers will have access to deeply discounted coverage, starting July 1.

Retirees ages 55 through 64 and their dependents in Pennsylvania, Ohio and Michigan are eligible for federally subsidized benefits worth tens of millions of dollars -- and potentially as much as about $5 billion, experts said on Thursday.

A federal bankruptcy judge in New York this week authorized creation of the Steel Retiree VEBA (Voluntary Employee Beneficiary Association) Trust, based on Bethlehem Steel Corp.'s bankruptcy filing 10 years ago.

Under the trust, retirees pay 27.5 percent of their medical, prescription-drug, dental and vision benefits cost. The federal government pays the other 72.5 percent.

Eligible retirees are not restricted to former Bethlehem Steel workers and dependents. The group includes retirees from more than 50 bankrupt steel companies, including Edgewater Steel, Republic Steel, LTV, Wheeling-Pittsburgh Steel and others.

A key qualifier is that the steel company must have had its pension terminated and turned over to the Pension Benefit Guaranty Corp.

"Anyone who worked for those companies can participate," said Gary Kaplan, a bankruptcy attorney at Farella Braun + Martel LLP, the San Francisco law firm representing the trust in the Bethlehem Steel bankruptcy case.

"The real purpose of the VEBA is to provide coverage while retirees are in the pre-Medicare period of age 55 to 64," said Kaplan. "They are the ones who fall between the cracks: They are not old enough for Medicare and can hardly afford health-care coverage -- if they can get it at all."

Once retiree reach 65, Medicare takes over their coverage, but their dependents remain covered under the VEBA trust for another two years, said Kaplan.

The federal subsidy stems from health-coverage tax credits made available through the American Recovery and Reinvestment Act, the economic stimulus law passed in 2009.

The law allowed a similar VEBA to be established for retirees of bankrupt auto-parts companies, said Cathy Cone, managing partner of Cone Insurance Group -- the Houston-based broker acting as the human-resources liaison between steel-company beneficiaries and Marsh & McLennan Cos., the plan administrator.

"We're reaching out to the newspapers to reach as many people as we can to find out about this," said Cone. "This (steel VEBA) even gives you choices and coverage options, depending on your needs."

Aetna Inc. provides the health and drug coverage. Metropolitan Life Insurance Co. provides the dental coverage. And VSP Vision Care Inc. provides vision coverage.

Officials at the United Steelworkers either declined to comment or could not be reached.

HELP BOX
For more information about the health coverage, visit www.conebenefits.com/steel or call             855-407-8335      .

In addition, experts involved in the coverage will conduct road shows in Western Pennsylvania in late June. Each day has two sessions -- 9 a.m. to noon, and 1 p.m. to 4 p.m. Here is the schedule:

--Pittsburgh, June 25: Sheraton Station Square, 300 W. Station Square Drive
--Greensburg, June 26: Ramada Inn, 100 Sheraton Drive
--Johnstown, June 27; Holiday Inn, 250 Market St.
--Mars, June 28: Four Points by Sheraton/Pittsburgh North, 910 Sheraton Drive
--Pittsburgh, June 29: Sheraton Station Square, 300 W. Station Square Drive

U.S. young adults want health insurance

Affordability, rather than a belief that they do not need insurance, is major barrier to U.S. young adults obtaining health insurance coverage, researchers say.

Sara R. Collins, Ruth Robertson, Tracy Garber and Michelle M. Doty of the Commonwealth Fund in New York said a survey of young adults from November 2010 to November 2011 found an estimated 13.7 million young adults ages 19-25 stayed on or joined their parents' health plans -- including 6.6 million who likely would not have been able to do so prior to the passage of the Affordable Care Act.
"Nearly two-of-five young adults ages 19-29 were without health insurance for all or part of 2011, with young adults in low- and moderate-income households the most at risk," the researchers said in a statement.

The lack of insurance had significant health and financial implications for young adults -- 60 percent said they did not get needed healthcare because of cost and half reported problems paying medical bills or said they were paying off medical debt over time, while 25 percent said they were paying off a medical debt of $4,000 or more.

There were 2.1 million live births in 2010 among women ages 20-29. Young adults ages 20-24 had the highest number and rate of HIV diagnoses of any age group in 2009, and 15 percent of young adults ages 18-29 had arthritis, asthma, cancer, diabetes, heart disease and hypertension.

Consumers Eager For Life Insurance, Survey Says

NEW YORK, May 17, 2012 /PRNewswire/ --A prime reason many uninsured individuals don't have insurance coverage is that no carrier has invited them to purchase their products, according to a Deloitte survey of life insurance buyers. Even insured individuals who are open to buying additional coverage often say that they have not been solicited by carriers.

"From our survey it is clear that life insurance is very much on the minds of many consumers," said Rebecca C. Amoroso, Vice Chairman and U.S. Insurance Leader for Deloitte LLP, who was the survey's executive sponsor.

Adds Amoroso, "A significant percentage of respondents have simply not been offered coverage recently; many also noted that they never shop for coverage on their own initiative. Not soliciting their business exacerbates this gap between insurers' interests and consumers' needs."

The survey – "The Voice of the Life Insurance Consumer" – was conducted to provide life insurers with insights into how people perceived the value of life insurance, including where coverage ranked among their other financial priorities, as well how consumers preferred to be reached. The survey covered buyers and non-buyers' related beliefs, motivations, influences, priorities and preferences.
Deloitte also identified some of the marketing challenges life insurers face in expanding their penetration among the uninsured and underinsured. "A significant number of respondents frankly don't know if they need more insurance – or if they do, they don't know how much they might need to buy," said Sam Friedman, Insurance Leader for Deloitte Research, who led the project. "Still others say they want life insurance but cannot afford it – leaving open the question as to whether these cost-conscious prospects might in fact purchase a policy if they realized what the price and value for coverage might actually be."

"Even current buyers did not overwhelmingly recognize many of the financial needs life insurance can fulfill, such as a source of cash in retirement, a way to save money for financial emergencies, or to help finance a child's college education," Friedman said.
T
hose who are insured more strongly identified with the value and benefits of life insurance than did those without coverage; yet even half or fewer of those with coverage do not associate their policy with all of the benefits that it can provide.

Other key findings from the survey included:

• 33 percent of respondents said they did not have coverage because no one had offered to sell them a policy.
• While life insurance is not the top financial priority for most, 45 percent of non-buyer respondents and 70 percent among those who have life insurance included it among their top five financial priorities.
• A significant number of the insured and uninsured intend to buy new or additional insurance in the next two years.
• Older prospects are harder to persuade with solicitations than younger consumers.
• The youngest respondents found the application and underwriting process to be much more onerous than was the case among older consumers.
• Financial triggers and familiar life events are very significant in the life insurance purchase decision. Yet because many respondents are either not aware of or don't understand the broader roles and benefits of permanent life insurance, they don't necessarily think of the product as a more comprehensive, longer-term financial planning solution.
 "Regardless of the state of the economy, life insurance continues to serve certain vital financial needs. From this survey it is clear that insurance companies can grow their business by customizing and expanding their educational outreach and marketing to consumers, based on their current insurance status, age and other key factors," concluded Amoroso.

Financial Advisors Rarely Offer Life Insurance

Financial advisors often miss the opportunity to speak to their clients about the important role life insurance products can play in financial planning, according to a recent survey conducted by Saybrus Partners, Inc.

According to a release, the survey found that more than half (56 percent) of financial advisors do not speak regularly to their clients about life insurance. The survey polled advisors at the 2012 Financial Advisor Retirement Symposium in Florida held earlier this month.

Surveyors said only one third (34 percent) of financial advisors said they were "very comfortable" recommending life insurance to their clients. Nearly one in five (18 percent) advisors admitted to being "uncomfortable" or "very uncomfortable" recommending life insurance policies to their clients.

"Our experience has shown that clients are looking to their financial advisors for comprehensive financial planning. Standard practice is that the planning process should begin with a foundation of protection and conclude with a wealth distribution phase," said Kevin Kimbrough, national sales manager for Saybrus Partners. "Therefore, it is critical for advisors to consistently include life insurance in their clients' financial plans."

The reluctance of financial advisors to speak to their clients about life insurance is consistent with consumer perspectives that were found in a survey conducted by Saybrus Partners in 2011.

Regular Policy Reviews Lacking
The company noted that even if a client has a life insurance policy, financial advisors don't necessarily make it a part of their annual review. Less than half (47 percent) said they review existing life insurance policies with their clients on an annual basis. Twenty percent said they only assess their clients' policies when they become aware of a major life change, such as marriage or the birth of a child. That review is most often narrowly focused on whether the policy is adequately meeting their current needs.

In addition, some financial advisors (10 percent) discuss clients' policies only if clients raise the issue.

"Advisors are constantly reviewing the performance of their clients stocks and other investments. By contrast, they are reviewing their clients' life insurance policies far more infrequently, based on life events or client requests," said Kimbrough. "This means that many of their clients may be lacking essential protection for themselves and their families or missing opportunities to more effectively transfer their wealth to the next generation. Life insurance is not a set-it-and-forget-it product. It should be monitored and adjusted, if needed.

"For example, market volatility can have a strong impact on the performance of variable life insurance products, and fixed products can suffer in a low interest-rate environment, potentially leading to unintentional policy lapse. Other issues include the possibility of missing out on more affordable rates and newly available features like long term care riders," Kimbrough said.

Life Insurance Specialists Strengthen Financial Advisor Confidence
When asked what would contribute to making them more comfortable discussing life insurance, 42 percent of financial advisors said they would be interested in either working with a life insurance specialist who can help identify solutions for their clients or attending a life insurance seminar aimed specifically at financial advisors.

"Advisors are clearly interested in integrating life insurance into their practices," said Kimbrough. "For example, by partnering with a life insurance specialist, they can offer a fuller range of portfolio options, solutions and overall advice to their clients without having to invest the time and effort needed to become experts. In many ways, the advisor is akin to a primary care physician performing an annual check-up and calling in a specialist for a second opinion. Through this type of partnership, advisors can ensure clients' needs are properly addressed, without exceeding the scope of their own expertise." 

Cult Leader Faces Trial in Murder for Insurance

WICHITA, Kan. -- The self-proclaimed leader of a Kansas commune that lived off life insurance payouts of its dead members has been ordered to stand trial on a charge of premeditated first-degree murder.

Sedgwick County District Judge Clark Owens entered the order Thursday at the end of a preliminary hearing for 52-year-old Daniel U. Perez.

Perez is accused in the 2003 death of Patricia Hughes at a compound near Wichita. It was initially listed as accidental.

Defense lawyers contended there was not enough evidence to put Perez on trial. Owens disagreed and scheduled a jury trial for July 30.

Perez did not speak at Thursday's proceeding. The judge entered not guilty pleas on his behalf to charges including murder, rape, sodomy, sexual exploitation of a child and lying on life insurance applications.
 

Big Changes Coming for Florida No-Fault Insurance Law

Significant changes to Florida’s no-fault auto insurance laws that deal with coverage provisions and criminal activity will start taking place in July 2012, although residents will not experience the full effect until January 2013. Gov. Rick Scott said he officially approved these changes on May 4, 2012, to hopefully decrease the number of falsified claims being made in the Sunshine State and reduce coverage costs. The existing no-fault personal injury protection (PIP) setup in the state has been said to breed a high level of staged accidents, inaccurate claims, and other less-than-reputable activity.

​​Combatting Criminal Activity
Many of the upcoming changes to PIP insurance in Florida are being done in an effort to prevent unlawful activity and decrease coverage costs for vehicle owners. When insurers are forced to pay out dishonestly adjusted accident claims, motorists statewide end up suffering in the form of higher premiums. A resident making a Florida insurance quote comparison may notice that the Sunshine State is home to some of the highest average coverage costs in the U.S. These adjustments to the law, however, hope to make a significant impact.

One major change taking place in July is that law enforcement officers will start being required to list all passengers on crash reports more frequently. This is intended to help prevent motorists from creating “phantom passengers” to recoup additional insurance benefits.

To discourage dishonest activity, there will also be harsher punishments for clinics and doctors who unlawfully take advantage of Florida’s no-fault system.

To improve the chances of success, the Sunshine State will also be forming a statewide, nonprofit monitoring group designed to prevent, investigate, and prosecute unscrupulous insurance-related activity within FL. When insurers are forced to pay fewer and only legitimate claims, residents are likely to find more affordable protection.

Starting on Jan. 1, 2013, motorists will also face greater limitations on how they can use their coverage.

Changes to Coverage

Beginning in 2013, drivers will only have 14 days to seek initial treatment for injuries sustained in an accident. If they don’t go in within that initial period, treatment will not be covered.

Vehicle owners who experience a medical emergency will have limited access to their medical benefits, depending on whether their condition is considered an emergency. People who only require nonemergency treatment will be limited to only $2,500 of coverage instead of the full $10,000. The full $10,000 can be used for emergency conditions, though. To qualify for a medical emergency, motorists need to experience severe symptoms that, without access to immediate medical treatment, could cause serious harm or impairment.

These benefits will also no longer be applicable to treatment from massage therapists or acupuncturists.

PIP currently provides at least up to $10,000 in medical benefits to policyholders, their children, members of the same household, and certain passengers who are not insured. Starting on July 1, 2012, this will also include a $5,000 death benefit.

Welcome to the Age of Digital Proof of Insurance

Advancements in modern technology have changed many aspects of everyday life, which may soon include how we provide proof of auto insurance. As many motorists already know, vehicle owners in almost every state are required to purchase a minimum amount of coverage to legally drive. To demonstrate that they have met these requirements, drivers need to provide adequate policy verification. One common problem, however, is that people often forget to update their records or keep the necessary documents in their automobile.

If drivers are unable to prove that they are sufficiently insured, they may face a number of consequences. Most commonly, offending motorists could be assessed a fine, their vehicle could be impounded, or they could lose their driving privileges. One solution that several states have begun to pursue is to allow vehicle owners to get proof of insurance online and display it on a mobile electronic device. This includes increasingly popular smartphones and tablets.

States That Allow Digital Proof

One of the first states to allow electronic verification was Idaho, where SB 1319 was recently approved in March. The passing of this bill means that, starting July 1, 2012, residents will be able provide their mandatory proof of liability insurance either in paper form or digital format.

Around the same time, Arizona also passed HB 2677, which allows residents to make the same electronic verifications.

Other states, such as Louisiana and California, are working to pass legislation that would allow motorists to have the same conveniences. As of June 2012, legislators in Louisiana have passed HB 1130, which now awaits approval from Gov. Bobby Jindal. This would allow policyholders to present digitized images of their policy during traffic stops.

Electronic Proof of Insurance Not Accepted by Everyone

Although a handful of states have begun embracing technology and looking for ways to help motorists avoid the consequences of driving without policy verification, using a mobile electronic device will not work everywhere. For example, the Florida Department of Highway Safety and Motor Vehicles has announced that electronic notification will not be accepted by the Highway Patrol. However, like many other states, legislation may soon be on its way.

Are You Getting Your Antitheft Insurance Discount?

Auto insurance discounts can be an excellent way for policyholders to cut coverage costs, but are all drivers receiving the right reductions? On March 29, a federal court in Pennsylvania found that several insurers in the state had been wrongly withholding state-mandated discounts for motorists whose cars had been equipped passive antitheft devices. Other Pennsylvanians with such devices may want to review their policies to make sure they’re getting the proper premium breaks.

In the case, suing policyholders believed that they were wrongfully denied a mandated comprehensive insurance coverage discount of at least 10 percent for having a passive security system installed in their vehicle. The district court agreed with them, concluding that these rate reductions are to be applied even without a policyholder’s request, leaving little wiggle room for insurers. Fortunately, not all savings require a multicompany legal battle.

It’s common for insurance companies to reduce the cost of a motorist’s comprehensive coverage for a vehicle equipped with an antitheft device, because these tools help to protect the insurer’s investment. If a car is outfitted with a passive disabling system and a GPS tracking device, the automobile in question is much more likely to be recovered. Because of these advantages, some states require insurers to give antitheft discounts, while in others insurers offer them voluntarily.

When rate reductions are mandated, however, it’s important for residents to take advantage. Rhode Island is one of the many states that also requires auto insurance coverage providers to issue premium reductions for insured drivers who own vehicles equipped with antitheft devices. This reduction can vary depending on the type of device, which was a major point of contention in the Pennsylvania case.

Rhode Island regulations spell out which types of devices get what levels of discounts in that state, with the types broken down into four main categories:

​Alarm only​: Audible devices that sound for at least three minutes and can be heard from 300 feet away (minimum 5 percent discount)

​Active disabling: ​Devices that make the car’s starting system inoperative and must be activated by the driver manually (minimum 5 percent discount)

​Passive disabling: ​Same as active disabling, but does not require the driver to manually activate it (minimum 15 percent discount)

​Vehicle recovery system: Electronic device attached to the vehicle that is activated when the car’s stolen and provides information to law enforcement or a private party on the vehicle’s location (minimum 25 percent discount)

In Rhode Island, having more than one of these devices can get the policyholder savings on comprehensive coverage of at least up to 35 percent. Even though these are state requirements, individual insurers may choose to offer additional savings as well. Other states’ device descriptions and minimum discounts will vary from Rhode Island’s.

Drivers who have equipped their cars with antitheft devices may want to check with their insurers to see if they are getting any appropriate discounts. And policyholders who are thinking about getting an antitheft device could maximize their savings by asking their insurer which type will yield the greatest premium break.

How Would TN Electronic Insurance Verification Affect You?

All motorists in Tennessee are required to purchase vehicle coverage to legally drive, but a lack of enforcement has helped make the state’s percentage of uninsured drivers one of the highest in the country. The Insurance Research Council estimates that in 2009 roughly 24 percent of motorists in the Volunteer State had not met the mandatory financial responsibility requirements. Based on these figures, nearly 1 out of every 4 drivers in the state are without protection.

In an attempt to rectify this problem, Senator Bo Watson has introduced SB 2292, which proposes the creation of an electronic insurance verification system in Tennessee, similar to systems found in Texas and Montana. If passed, coverage providers will work diligently with state departments and local authorities to create an electronic database where county clerks and law enforcement officers can quickly and easily verify whether or not a motorist is insured.

With this system in place, state officials would verify whether vehicle owners have purchased auto insurance in Tennessee in order to register or renew registration on their automobile. These digital records would be automatically updated by insurers whenever any changes are made to a person’s policy, which includes cancellation. Additionally, this system could be used by law enforcement officers in lieu of other types of policy verification, like an insurance card or binder.

What SB 2292 Could Mean for Tennessee Residents

State legislators who support SB 2292 hope that passing this bill would significantly decrease the number of uninsured drivers in Tennessee. For residents who insist on driving without sufficient protection, this system could mean stricter enforcement. If residents are caught driving without liability insurance, they could be convicted of a Class C misdemeanor and fined up to $100, they may lose their driving privileges, and a STOP will be placed on their automobile preventing registration renewal.

After the passing of HB 2466 in April 2012, convictions for driving while uninsured have also gotten harsher. This bill stipulates that any drivers who are involved in an accident that results in serious bodily injury or death, and who are unable to provide proof of insurance, are to be arrested instead of receiving a citation. If SB 2292 is passed, these two bills could make a significant blow to uninsured-driver statistics in Tennessee.

For the average law-abiding motorist, however, this system could translate into greater convenience and a lower chance of being involved in an accident with an uninsured driver. Additionally, one positive assumption made by the Tennessee General Assembly Fiscal Review Committee is that the introduction of this system would encourage over 400,000 uninsured motorists to purchase protection. If so, this could lead to an extra $3.36 million in annual tax revenue, based on the current 2.5 percent tax on gross premiums.