Prices are rising and availability is shrinking for some advanced insurance aged clients seeking the guarantees Universal Life Insurance (UL) offers.
The new versions being introduced in the marketplace are showing UL life insurance premium increases of at least 10% to more than 20% versus the prior series of policies on the same face amounts.
The premium increases are a result of several different factors. The first is the number of re-insurers bidding on these blocks of policies (and profits) is substantially less than the number that were available just ten years ago. As far as major players go, it is reported with mergers and changes in willingness to underwrite blocks of certain policies, there are about half of what was available in the early 90's for insurers to even shop out to help manage internal loss risks.
Enough time has passed that actuaries are now seeing the results of past mistakes in underestimating the life spans previously expected for insured's that allowed them to collect a smaller amount of premiums than that amount that was really required to remain profitable. Having quickly learned from their past pricing mistakes, they will not be repeated again in premiums that just a few years ago were a little too optimistic, and a little too low, although they were in retrospect a great bargain for the consumer.
Regulators have also cracked down on how adequate reserves are calculated and set aside. This new need, if identified, will not be funded from existing profits, but will be most likely funded from collection of higher premiums going forward.
Another area that can benefit the consumer is how the premium is calculated. An experienced agent will know that different companies price the product on either your last age, or your nearest age. This difference of one birthday could save thousands of dollars in premiums over the life of the policy, so you agents experience, and your timing is worth a lot of money here...yours!
If you have not taken the time to complete a review on all your life insurance coverage recently, there is no better time to contact an independent agent to find what your coverage bargains could be and lock in low premiums now for years to come.