New Ameritas Term Product Gives Agents More Options

Independent agents selling Ameritas Life Insurance's new term life insurance product can expect more commission options, a company executive said Thursday.

Agents selling Value Plus Term have the choice of a lower first-year rate and higher renewals, or higher first-year rates and lower renewals, explained Kelly Halverson, second vice president of individual product development with Ameritas.

Keystone Term, Value Plus Term’s predecessor, didn’t offer agents that same flexibility, Halverson said.

The enhancements are part of the Lincoln, Neb.-based life insurer’s efforts to inject more flexibility into Value Plus Term as the company phases out Keystone Term. The latter product been an Ameritas mainstay for more than a decade.

But the flexibility offered by Value Plus Term isn’t limited to agent commissions as new options have been added to product features and pricing as well, Halverson said.

Value Plus Term offers the company’s most competitive term rates ever across all ages, genders, face amounts and rate classes, the company said.

“We’re getting very competitive pricing that's consistent with the top players in the industry,” Halverson said.

Surveys show that consumers want more flexibility in their insurance policies. Meanwhile, insurers want to push further into an underpenetrated life insurance market suffering from sluggish sales and interest rates that although rising, remain low.

Conversion Privileges a Big Selling Point

While premiums for 10-, 20- or 30-year terms are competitive and have existed on term life insurance policies for many years, the conversion privileges to permanent life insurance are among the richest in the industry, Halverson said.

Advisors looking to convert blocks of term life coverage – say $250,000 or $500,000 – into permanent life is where Value Plus Term offers more flexibility, he said.

A new pricing band for face amounts at and above $3 million, and deep discounts for multiple policies, encourage advisors to ladder policies. That could potentially slash premiums by as much as 46 percent versus buying the full coverage amount in all years, Halverson said.

The terminal illness rider on Value Plus offers policyholders access to up to $1.5 million compared to only $500,000 on Keystone Term, he said.

Like Keystone Term, Value Plus Term riders include an accidental death benefit, children’s insurance and a waiver of premium.

Back-end enhancements in the fully underwritten Value Plus Term product have also made applying for the coverage faster and smoother, Halverson said.

Keystone Term was launched in 2005 and has gone through repricing and revisions. Value Plus Term will be offered everywhere except in New York State, where the Value Plus Term filing is pending, he said.

Value Plus Term was launched in October. Overall third-quarter sales of term life rose 1 percent compared to the year-ago period, LIMRA reported.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at cyril.tuohy@innfeedback.com.