Insurance Pro Blog Podcast | Life Insurance and Annuity Insights

 

To continue on with the discussion of potentially rising interest rates…

We actually get into what it might mean for life insurance companies and for your life insurance policy–whether it happens to be participating whole life or universal life.

Major discussions in this episode:

* How quickly can you expect your dividend (WL) and/or interest rate (UL) to increase if Greenspan's prediction of a whipsaw comes true?

* Will the life insurers who were “forced” to raise expenses in their UL contracts over the last couple of years, lower these price increases as interest rates rise? (given that most of them gave the excuse of having to deal with a “prolonged period of low interest rates” to raise their prices on existing policies)

 

Former Federal Reserve Chairman, Alan Greenspan, believes the next bubble to burst will not be in the equity markets…it will be a normalizing of yields in the bond market as inflation ticks up. During a Bloomberg interview, Greenspan said… “By any measure, real long-term interest rates are much too low and therefore unsustainable” And ... Keep Reading

 

 

Former Federal Reserve Chairman, Alan Greenspan, believes the next bubble to burst will not be in the equity markets…it will be a normalizing of yields in the bond market as inflation ticks up.

During a Bloomberg interview, Greenspan said…

“By any measure, real long-term interest rates are much too low and therefore unsustainable”

And he went on to say…

“When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace”

Greenspan also warned that we are headed toward a “stagflation” that we haven't seen since the 1970's.

But what does any of this have to do with life insurance?

As we all know, life insurance companies are large buyers of bonds and have been long-suffering over the last several years as their bond portfolios mature and they're forced to buy bonds with much lower yields.

Come back next week to hear our take on what it all means for life insurance companies.

Did you know that it's possible to outlive your permanent life insurance? That entire sentence is discombobulating. When does permanent not really mean permanent? Recently, a pending court case was brought to our attention on Joseph Belth's blog (former publisher of the Insurance Forum) that raises some interesting debate. You should really take a ... Keep Reading

 

Did you know that it's possible to outlive your permanent life insurance?

That entire sentence is discombobulating. When does permanent not really mean permanent?

Recently, a pending court case was brought to our attention on Joseph Belth's blog (former publisher of the Insurance Forum) that raises some interesting debate. You should really take a few minutes to read the entire blog post if this sort of thing interests you, it's worth a quick read.

The long and short is that a gentleman and his wife (Mr. and Mrs. Lebbin) formed an irrevocable life insurance trust (ILIT). They made their two children the trustees, gifted money to the trust each year and the proceeds were used to purchase two separate survivorship and/or second-to-die universal life policies from Transamerica. Mrs. Lebbin is deceased which leaves Mr. Lebbin as the insured.

All seems normal. However, Mr. Lebbin is approaching his 100th birthday and the policies were designed to endow (mature) at age 100. Thus he will receive the net cash value (of unknown value to us).

Mr. Lebbin would like for Transamerica to extend his maturity beyond 100. Transamerica has decided not to do that.

And so begins the lawsuit.

Listen to the episode to hear what we have to say about it.

In episode 75, our discussion revolves around a suggestion that comes from this article over at Fox Business. In particular, the article points out that many larger and well-known employers are aggressively raising their matching contributions for their employees in the company 401k plan. The article goes on to suggest that companies believe this is ... Keep Reading

In episode 75, our discussion revolves around a suggestion that comes from this article over at Fox Business. In particular, the article points out that many larger and well-known employers are aggressively raising their matching contributions for their employees in the company 401k plan.

The article goes on to suggest that companies believe this is an effective means of retaining talent and helping workers accumulate enough money to retire–making way for younger employees.

We think that all sounds great. More money from the company you work for toward your retirement is generally a good thing.

But…do people really stay with a company because of the matching contribution in the 401k? Not likely.

We've both been in the business of talking personal finances with people for a number of years and never heard anyone mention their sweet 401k as a reason they stayed at a job. The best retention tool seems to be actually paying people more.

 

Recent settlements have been reached between policyholders and a couple of mutual life insurance companies. Turns out an obscure bit of insurance regulation from 100 years ago might get you an extra $22 that you weren't expecting. We've been asked a few times about these lawsuits over dividend underpayment, so we'd share our perspective ... Keep Reading

 

Recent settlements have been reached between policyholders and a couple of mutual life insurance companies. Turns out an obscure bit of insurance regulation from 100 years ago might get you an extra $22 that you weren't expecting.

We've been asked a few times about these lawsuits over dividend underpayment, so we'd share our perspective on the issue in episode 74.

Recent comments from Fed Chairman, Janet Yellen, indicate that she thinks we'll never see another financial crisis like we saw in 2008. She's probably right but is that really a profound observation? Recent comments from Fed Chairman, Janet Yellen, indicate that she thinks we'll never see another financial crisis like we saw in 2008. She's ... Keep Reading