By Cyril Tuohy
MetLife has introduced a program that shortens application and underwriting procedures for its Whole Life Select 10 life insurance product. This is a move designed to appeal to applicants as well as advisors looking to sell more policies.
The program, introduced in January, is known as “Enhanced Rate Plus” (ERP). Smokers are not eligible for the program.
ERP offers a boost in rating class by one and sometimes even two steps. It also delivers a faster underwriting process via a telephone application and interview, which means more sales for advisors as applications are closed sooner, MetLife officials said.
Gene Lunman, executive vice president of Retail Life and Disability at MetLife, said that by cross-checking databases and running underwriting engines used to evaluate an applicant’s risk, “a high number” of Whole Life Select 10 applicants are expected to qualify without a paramedical exam.
The exams require drawing blood. Many applicants find the process inconvenient.
Lunman also said the changes are aimed at increasing the overall market for whole life as opposed to adding features to a whole life product in the hopes of taking market share from another carrier.
“ERP is an underwriting program wrapped around a particular product,” Lunman told InsuranceNewsNet. “The idea is not to compete head to head with a feature here and there. In life insurance today, there’s a lot more shift from one carrier to another as opposed to growing the pie.”
For the time being, ERP is only being applied to Promise While Life Select 10 as the company evaluates the program.
“We’re experimenting and learning because we’re clearly taking more risk but we think there are benefits,” Lunman said. “We’re using this particular product for the starting point to do that. Our goal is to do it with more products but we (first) want to collect data.”
Buyers of Whole Life Select 10 policies are “fully paid up” in 10 years. After paying premiums for 10 years, policyholders don’t pay another cent in premium. Meanwhile the cash value in the policy earns interest.
Other products in the Whole Life Select family include Whole Life Select 20 and Whole Life Select 65, where policyholders are paid up by age 65. The ERP program isn’t being applied to Select 20 and Select 65 just yet, Lunman said.
Introduced in 2013, Whole Life Select 10 is the “perfect test bed” for the ERP program and MetLife is looking to see whether ERP attracts more advisors, Lunman said.
Insurance industry analysts say low interest rates have created a “headwind” for life insurance sales.
Carriers have no control over interest rates, but they have control over underwriting and life insurance application procedures. Experimenting with faster, more efficient ways of issuing policies offers an avenue for carriers to increase sales.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at email@example.com.
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