It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
By Cyril Tuohy
Aflac announced it has raised face amounts for its whole and term life policies, and has included a guaranteed-issue option for term life with a face amount of up to $25,000.
The company’s individual whole life and term life insurance plans are offered for up to $500,000 for people under age 50, and for up to $200,000 for individuals from ages 51 to 70 for whole life plans and ages 51 to 68 for term life plans, the company said.
Guaranteed-issue is available for up to $25,000 of term life coverage, the company also said. Term life typically lasts for 10, 20 or 30 years.
“No one likes to think he or she needs life insurance,” J. Keith Pellerin, vice president of product management and innovation at Aflac, said in a statement. “But when people depend on you, assuring their financial futures with life insurance benefits is simply the right thing to do.”
The 2013 Aflac WorkForces Report found that 57 percent of U.S. workers don't have a financial plan to handle the unexpected, and 25 percent have less than $500 in savings for emergency expenses.
Separate research conducted by LIMRA has found that as many as 41 percent of U.S. adults, and that as many as 56 percent of adults between the ages of 25 to 45, have no life insurance.
Consumers say they are receptive to many life insurance products, which are among the simplest and most stable offered by life and retirement insurers. Life insurance sales, hurt by low interest rates, have remained flat.
Raising the face amounts of policies is one way to make life insurance more attractive. The other is to add some flexibility in the products and how they pay out on the benefit.
Adding more flexibility to its life insurance chassis, Axa introduced its BrightLife Protect universal life insurance policy earlier this year.
“BrightLife Protect is a product designed to bring financial protection within reach of the modern American family juggling multiple financial priorities, such as saving for a new car, planning for college and putting money aside for retirement,” said Nick Lane, head of Axa’s U.S. life and retirement business.
BrightLife Protect offers a flexible premium with an index-linked interest option to shield policyholders from investment losses, the company said.
The policy includes a long-term care rider and flexible premium payments. Flexible payments allow policyholders to skip or reduce payments – in exchange for a lower cash value but at the risk that the policy will lapse.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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