The sub-prime mortgage crisis could have a negative impact on the sale of life insurance products, according to a recent research report issued by LOMA, Atlanta.
The report is titled “The Sub-prime Mortgage Crisis: A Crisis of Structured Finance and Its Effects on Insurers.”
Among the possible impacts the report says the crisis may have is that insurers may see a drop in the demand for life insurance and annuities and an increase in fraud.
The reason, the report explains, is that households in financial trouble are less likely to buy life insurance or annuities. The report adds that more policyholders will borrow against their policies to lapse or sell them through life settlements.
Additionally, the report continues, the growth of accumulation annuity considerations is likely to slow.
Other possible outcomes include: