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Ideas: Hybrids; The Life Insurance Game; Benefits Acceleration; The Perfect 401(k) Plan; Make It Simple, Sweetie

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Forethought Financial Group Inc. thinks U.S. residents are looking for annuities that can do more to help them prepare for the risk of needing long term care.

A hybrid annuity provides features that can help holders pay for LTC expenses.

Provisions in the federal Pension Protection Act of 2010 and Internal Revenue Service rulings have encouraged use of hybrid annuities by clarifying the annuities’ tax status.

Some financial professionals think LTC insurance is still better for consumers who end up needing long term care, but professionals who sell the hybrid products say they are more flexible and have more appeal for consumers who may not be willing to consider a traditional LTC policy.

Many consumers already have been buying annuities with LTC expenses in mind, according to Paula Nelson, a Forethought distribution executive.

In other ideas news:

- AXA Equitable Life Insurance Company, New York, a unit of AXA S.A., Paris, has been using an online game to give players a chance to use expense control and life insurance decisions to guide virtual families to a better financial future.

Players have a chance to win $25,000 or $15,000 cash prizes through a related sweepstakes.

Players also can vote on allocating real money to three different charities.

David O’Leary, an AXA Equitable executive vice president, says the company sees the game as a low-stress way to help consumers to think about an inherently uncomfortable topic.

- American General Life and Accident Insurance Company, Nashville, Tenn., a unit of American International Group Inc., New York (NYSE:AIG), says it is emphasizing the life-long permanence and principal-protection features associated with indexed universal life (UL) insurance.

“Many consumers today seek quality long-term protection, competitive interest rates and safety of principal,” American General says.

Indexed UL products can satisfy all three desires, the company says.

- The Transamerica Center for Retirement Studies, Los Angeles, is distributing “The Perfect 401(k) Plan,” a paper by Catherine Collinson that describes what she thinks is the perfect defined contribution retirement plan.

She says the perfect plan”

  1. Maximizes employee participation and contribution rates.
  2. Provides and promotes incentives to save.
  3. Educates and empowers employees to make informed decisions about retirement saving, planning and investing.
  4. Underscores the need for workers to have a retirement strategy.
  5. Maximizes plan effectiveness (including investments, education, customer service) and participant satisfaction.
  6. Serves as a highly effective tool for employers to attract and retain employees.

- Minnesota Life Insurance Company, a subsidiary of Securian Financial Group Inc., St. Paul, Minn., says it has been working to make agents’ lives easier by easing or eliminating underwriting barriers that seem to be repetitive or turn out to add no value.

The company is using paramedic exams in place of exams conducted by physicians, requiring fewer EKGs for younger applicants, and using shorter personal history interviews and commercial inspection reports.

Those changes and others are effective with Minnesota Life applications submitted on May 23, 2011, or later.

- Allison Bell

Other ideas coverage from National Underwriter Life & Health:


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