The curious case of mutual life insurers and life settlements

This stance is made all the more curious considering that mutual insurance companies tout that they are owned by, and work for, their policy owners.  These large mutual insurers take their anti-consumer actions further by prohibiting their producers from assisting their clients with life settlement transactions, even if the proposed policy to be sold is not one written with their company.

Apparently, these mutual insurers’ concern for their policy holders ends when they want or need to do a life settlement.  It seems that they have taken a page out of George Orwell’s book, Animal Farm:  “All animals are equal, but some animals are more equal than others.”

All this, of course, raises the question as to why large mutual insurers expend so much money and energy opposing life settlements — a question they have never answered. Could it be simply about protecting their own turf from universal life competition?  The potential of a life settlement adds value to universal life and makes the product more attractive, but has little impact on whole life.

The anti-consumer, anti-life settlement behavior of large mutual insurers undermines the principles upon which those companies were supposedly founded and puts their producers in the position of having to follow their companies’ dictates over the needs of their clients.  It is time for those companies to re-think their position.