Top life insurance stories of 2022 focused on COVD-19, business case for buying life insurance
December 27, 2022 by Ayo Mseka
Advisors spend a great deal of time persuading their prospects to protect themselves and their loved ones with the gift of life insurance. The most popular stories in 2022 ranged from record setting indexed life sales to re-thinking the “buy term and invest the difference” strategy, to the continuing controversy over IUL illustrations. Here’s a look at the most-read life insurance articles in InsuranceNewsNet in 2022.
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Product experts: Regulators need to end “gamesmanship” of IUL illustrations
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Sheryl Moore of Moore Market Intelligence and Bobby Samuelson of The Life Product Review co-authored a comment letter on Actuarial Guideline 49-A. The pair are competitors in the product intelligence field. The Moore/Samuelson letter did not hold back on the need for immediate regulatory action. Some IUL fixed interest bonuses can generate illustrated income more than 60% higher than a base index, such as the S&P 500, they wrote.
“This is, in our view, entirely inconsistent with the intent of regulators in crafting AG 49-A,” the letter reads. “The gamesmanship currently occurring in illustrations is similar in effect and pervasiveness to the buy-up caps and multipliers that proliferated after AG 49 and resulted in AG 49-A.”
The Moore/Samuelson letter identified three tactics insurers are applying to new IUL illustrations:
- Using indices with lookback-based illustrated option profits far in excess of the BIA;
- Reducing the actual option budget so that the lookback rate for the non-BIA account matches the BIA; and
- Deploying the savings in a fixed interest bonus that is added to the illustrated rate and loan arbitrage.
