Another Insurance Executive Rings An Ominous Industry Bell Because Of Low Interest Rates

In the last few years we have written over 20 articles on the cost of insurance (COI) increases that have plagued the life insurance policies we manage.  The main reason for those increases?  Most would say the historic low interest rate environment that we are (still) in. In a post published just over a year ago, we listed some low rate winners and losers. When [...]

Second Amended Complaint Filed In The Brach Family Foundation Lawsuit Against AXA For Cost Of Insurance Increase

Late last week, a Second Amended Class Action Lawsuit was filed in the United District Court, Southern District of New York in the Brach Family Foundation vs. AXA Equitable Life Insurance Company case we first wrote about on February 2, 2016. The 35-page document expands and adds to the original 18-page Class Action Complaint filed February 1 of last year, and follows on the heels [...]

Life Insurance: An Efficient Way To Pass On Wealth

Life insurance has been a challenging financial product to manage in the last year or so and we have written often about the issues that surround this asset. But we also believe that this is a powerful financial tool. In our last blog entry we wrote about its use to mitigate the negative effect of a tax law change that may occur in 2017. At [...]

Latest Federal Reserve Hike Viewed as Generally Positive for Life Insurance by Moodys

Less than two weeks ago, we reported that Moody’s had downgraded its 2017 outlook for the life insurance sector from Stable to Negative. A new Moody’s report published after the Federal Reserve raised its benchmark federal funds target rate by 25 basis points last week indicates that hike will benefit life insurers and “help reverse the downward march in investment portfolio yields.” (1) The federal [...]

Northwestern Mutual Dividend and Crediting Rates Drop, Expenses Rise

Over the last two years, we have written extensively about the impact of the low interest rate environment on life insurance policy performance, primarily Current Assumption Universal Life policies. Many carriers have pointed to low interest rates as a primary cause for their cost of insurance (COI) increases in these policies. Anyone who has attended one of our webinars on life insurance policy subjects (see: [...]

Cost of Insurance Finger Pointing: Who Is To Blame?

The cost of insurance (COI) increases of the last 18 months have wrecked estate plans and created financial hardship among policy owners. The negative effect is clear – some policy carrying costs have more than doubled (see:Transamerica Cost Increase Causes Premium to Maturity to More Than Double: A Case Study for Trustees).  What is not so clear – who is to blame? No less than five [...]

Low Interest Rate Winners and Losers

In the past year or so, we have highlighted the issues around the historic low interest rate environment, specifically the negative effect on insurance carriers and products. Since life insurance policy management is our focus here at ITM TwentyFirst, these issues are natural for us to cover. Clearly, many life insurance policyholders are suffering due to the fallout from these low rates. So much so [...]

Why Brexit Is Bad For Your Life Insurance Policy

The historic vote this week on a non-binding referendum to determine whether the United Kingdom should leave or remain in the European Union has made headlines. The 52–48% vote, with a participation rate of almost 72% of the electorate, was in favor of exit by a 4% margin. The fallout from this decision has been felt around the world, but how will it affect life [...]

Why the Cost of Insurance Increases? Some Possible Reasons

In the past few years, we have posted many entries dealing with the cost of insurance (COI) increases we have seen in Current Assumption Universal life (CAUL) policies. Almost three years ago, we were among the first to begin ringing the bell on this issue (see: If The Cost Of Insurance Goes This High, You Are Guaranteed To Have Some Angry Clients.) We have been asked [...]

Will the Universal Life Price Increases Spread?

Our firm manages life insurance for TOLI trustees and institutional investors, and I have heard a concern from both parties about the recent Current Assumption Universal Life (CAUL) cost increases. People are worried about the direction of in force policy pricing. Are the increases an aberration or will they spread? I am not a soothsayer, nor am I on the boards of any of the [...]

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