In a life insurance market where many of the sleek new policy designs, riders and wrinkles are associated with permanent products, it?? 1/2 s easy to overlook term insurance.
After all, term life is a straightforward, highly commoditized product that has changed relatively little over the decades outside of a few notable exceptions, such as the widespread move in the early-to-mid-1990s to level premium products. By nature, term life is a product not especially accommodating to innovation.
But insurance carriers can be a creative lot, and these days, their efforts to innovate aren?? 1/2 t limited to permanent insurance products. Carriers continue to bombard the marketplace with a huge array of new features designed to make universal and whole life products sexier to the masses. But they are also quietly sprucing up the old term chassis as well, adorning it with new riders and more flexibility while also making it more consumer-friendly in the areas of pricing and underwriting.
Some of these enhancements have already hit the market, while others loom on the not-too-distant horizon. Slowly but surely, term products are adapting and evolving, which suggests to insurance experts like Marvin H. Feldman, CLU, ChFC, RFC, that it may be time for advisors to take a fresh look at their clients?? 1/2 insurance portfolios. ?? 1/2 There is additional pressure on [insurance] companies to continue designing new, creative [term] products,?? 1/2 says Feldman, president and CEO of LIFE, the Life and Health Insurance Foundation for Education in Arlington, Va. ?? 1/2 It?? 1/2 s going to be an exciting time for advisors because we will have so many more options available to us. For advisors, it means there will be a lot more flexibility to really massage the [insurance] program so it better fits our clients?? 1/2 needs.?? 1/2
One of the newest developments with term products is the availability of health riders on certain policies. ?? 1/2 A handful?? 1/2 of companies have begun offering critical illness and disability riders on some term policies, according to Marianne Purushotham, research actuary for LIMRA International, a Connecticut organization that tracks trends in the life insurance market. While the benefits associated with those riders ?? 1/2 aren?? 1/2 t huge,?? 1/2 she says they?? 1/2 re substantial enough to help people cover mortgage costs and other obligations.
Having already made a splash in the annuity and permanent insurance markets, additional combination products soon could find their way into the term marketplace as well, says Feldman. ?? 1/2 You will see term policies with a long-term care [insurance] feature and health riders. It?? 1/2 s going to happen.?? 1/2
?? 1/2 Products seem to be moving in the direction of one-stop-shopping.?? 1/2 adds Purushotham, ?? 1/2 You can buy one product to insure for multiple risks.?? 1/2