By Cyril Tuohy
Seeking to penetrate further into the middle market, The Phoenix Companies has announced the addition of a new term life product with living benefit riders and a Web-based distribution agreement to complement its distribution through independent marketing organizations.
The new term life coverage is branded as Phoenix Safe Harbor Term Life and Phoenix Safe Harbor Term Life Express. The Express product will be distributed through LifeQuotes.com, the company said.
“Adding term life to our middle market insurance portfolio is an important step for Phoenix as we also launch a call center distribution capability,” Thomas M. Buckingham, executive vice president for product and operations, said in a news release.
The term life offerings and the call center initiative are expected to “contribute substantially” to the growth in the company’s overall product lines, he said.
Safe Harbor Term Life offers benefit riders that advance the death benefit in case of chronic illness, critical illness or terminal illness. The policy also offers an unemployment rider, and an accidental death benefit rider.
Face amounts range from $50,000 to $1 million.
Safe Harbor Term Life Express offers the same benefits as its fully underwritten cousin, but face amounts range from $25,000 to $400,000, the company also said.
Phoenix Cos. is the latest example of a life insurance carrier looking to add flexibility to term, whole and universal life insurance policies in an attempt to capture some of the opportunity in a vastly underinsured — and uninsured — middle market for life insurance.
The difference between the median amount of life insurance coverage in place compared with the amount needed to cover self-reported needs — a metric known as the insurance coverage gap — widened by more than $30,000 in the five-year period ending in 2013, according to the results of a study by New York Life released earlier this year.
Despite the size of the opportunity, insurance companies have found selling term life insurance slow going in an era of low interest rates.
First-quarter 2014 term life annualized premiums shrank 4 percent, face amounts dropped 4 percent, and the number of policies sold dipped 6 percent compared to the year-ago period, according to LIMRA’s U.S. Individual Life Insurance Sales Summary report.
Safe Harbor Term Life is being distributed through independent marketing organizations including Brokers Alliance, Shoreline Financial Group and National Agents Alliance.
Safe Harbor Term Life Express is being sold through those distributors as well as LifeQuotes.com, which represents many carriers.
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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