By Cyril Tuohy
John Hancock has announced the launch of a streamlined variable universal life insurance product, which the company says will be a “quick and easy” way for advisors and the insured to obtain coverage.
Advisors can access marketing materials as well as run through the easy 3-step sales process from jhsimplifiedlife.com, Hancock said.
Branded as Simplified Life, the streamlined underwriting processes mean that applicants don’t have to undergo medical exams or tests and most policies will be issued in eight days or less, the company added.
"Simplifying the application process and streamlining the sales process with Simplified Life, helps more consumers meet their financial goals and provides advisors, especially those who have traditionally not sold life insurance, with an opportunity to grow and diversify their business," said Mike Doughty, president of John Hancock.
Surveys show that consumers want the life insurance industry to develop simpler products, and they want insurers to deliver those products faster through more channels.
Approval for traditional paper-based 30-year life insurance policies can take as long as two or three months since carriers need to wait for and process medical data before they can set premiums.
Variable universal life policies offer consumers protection benefits, the potential to accumulate cash value and tax advantages. Accumulated cash helps supplement retirement income, fund college education or meet family or business planning needs, Hancock said.
Policyholders will be able to choose to invest in diversified investment accounts representing the major asset classes and investment styles, or opt for the simplicity and automatic diversification offered by John Hancock's Lifestyle MVP Portfolios, Hancock also said.
VUL sales recorded strong growth in the first quarter 2014 in an otherwise lackluster period of individual insurance sales hobbled by low interest rates, according to LIMRA.
In the first quarter, annualized VUL premiums surged 20 percent compared to the year-ago period, and face amounts rose 11 percent compared to the year-ago period, LIMRA research found. The number of policies also rose 20 percent, LIMRA said.
Half the top 10 insurance writers reported increases making the first quarter the sixth consecutive quarter of positive growth for VUL, LIMRA said. VUL market share represents 6 percent of total individual life insurance premium.
Combined first quarter, annualized premiums for all classes of individual life insurance — universal life, VUL, term and whole life — dropped 7 percent compared to the year-ago period, according to LIMRA statistics.
Combined face amounts for all individual life insurance lines declined 7 percent over the same period and the number of policies for all lines dropped 5 percent in the first quarter compared to the year-ago period, LIMRA also said.
VUL was the only line to report increases in annualized premiums, face amount and number of policies. The three other lines, universal life, term and whole, all registered declines in each of the three sales categories, LIMRA said.
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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