Wrap Contracts Coming Back Strong Among Insurers

                New York Life found that despite low interest rates, 50 percent of retirement-plan participants use stable value products, which are classified as principal preservation investment solutions.

“Since the financial crisis of 2008, on average more than 20 percent of retirement assets have been invested in stable value investments and half of all participants across New York Life's retirement platform have some 401(k) savings within a stable value investment today,” said Steven Dorval, managing director of retirement and investment strategy at New York Life Retirement Plan Services in Boston.

New York Life began working with the largest stable value plan sponsors two years ago, purchasing wrap contracts that guarantee the principal on a fixed income portfolio. “The wrap contract is a return home for insurance companies,” Dorval told Insurance Networking News. “We were the early providers but lost the lead to bank holdings who offered lower margins. Insurers are back now in their natural role as guarantors.”

Pricing for the cost of a wrap contract before 2008 was .05 to .08 basis points, according to New York Life. Today, pricing is .2 to .25 percent basis points.

“It’s more than an $8 billion book of business for us, which has increased $5.5 billion since 2008,” said Dorval. “From a competitor perspective, a number of insurers, including Prudential, have seen more assets increase because stable value products are able to earn higher returns than money markets.”

Stable value funds are yielding two percent or more. The benefit for investors is return without the volatility.

“That’s a significant increase over money markets,” Dorval said.

Interest in stable value products is not exclusive to the baby boomer generation, according to New York Life’s analysis.

While baby boomers did have the highest rates of stable value use at 58 percent, the Gen X and Gen Y demographic were not far behind with rates of 46 percent and 32 percent, respectively.

“As people get closer to retirement, principal preservation is a higher priority,” said Dorval. “Younger folks shouldn’t have stable value exposure but across all demographics, we are finding that younger workers do have exposure because they may be more conservative due to the down market.”

© 2012 Insurance Networking News and SourceMedia, Inc. All Rights Reserved. 

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Vakuutusasiamiesten peritään 100 miljoonan dollarin petosten järjestelmässä

                   The Manhattan United States Attorney and the Federal Bureau of Investigation have charged three insurance agents with a $ 100 million fraud scheme involving stranger-owned life insurance or STOLI.

Typically, people buying a life insurance policy have some relationship to the person being insured. In contrast, with STOLI arrangements, a policy is bought with the intent to resell it to a third-party investor. Many insurance companies won't allow this, and in varying degrees the state laws prohibit it.

In an imprisonment up to 10 years, federal authorities announced on Feb 16 – Michael Binday accuse the three agents, to 48, the president and owner of a Scarsdale, N.Y. insurance agency; James Kevin Kergil, 57, an insurance agent based in Peekskill, N.Y.; and Mark Resnick, 56, an insurance agent based in Orlando, FL – of conspiring to defraud major insurance companies into the life insurance policies to straw buyers issuing, when the true owners of the policies were third-party investors and financiers. All three agents have been arrested.

The insurance companies referred to in the case are: American General Life Companies; Lincoln Financial Group; Security Mutual Life insurance Company and Union Central Insurance Company.

The policies involved were universal life policies, which combine an investment component with a death benefit-an amount paid to beneficiaries when the insured dies. Life insurance companies routinely take the position that the death benefit should correspond to the amount of money that the dependents would need insured's to replace lost earnings or to cover estate taxes and other expenses. When issuing the policies they rely on is the information provided about the applicant's financial condition and income.

In a statement announcing the U.S. Attorney Preet Bharara in Manhattan imprisonment up to 10 years, said that the three insurance agents concocted an elaborate scheme ", using straw buyers and third-party agents, to deceive the life insurance providers into issuing policies to unintended beneficiaries. And when their scheme was unraveling, they allegedly sought to throw investigators off the trail by destroying documents and telling other individuals to lie. Their alleged actions victimized the companies that issued these policies, and hurt the grand jury process. "

According to the imprisonment up to 10 years, the agents recruited elderly clients of modest means to serve as straw buyers and apply for universal life insurance policies. In exchange, the agents would pay them when the policies were resold.

Meanwhile, the agents did the necessary paperwork, misrepresenting the key elements of the application. For example, they stated that the straw buyers were worth millions, although almost all of them had a net worth of well under $ 1 million. They shifted the money around to make it look like the buyers were paying the premium themselves, while in fact it was coming from third-party investors.

While the applications stated that the buyers did not intend to sell their policies after they were issued, the agents had already made arrangements to sell them on the secondary market. All this generated millions of dollars worth of huge commissions for the agents.

As the notes, insurance fraud hurts companies imprisonment up to 10 years because it leaves them holding the bag in a bad business deal. And that indirectly hurts consumers because companies must raise their premiums to make up for lost profits.

The misrepresentations at every turn, imprisonment up to 10 years describes in some cases starting with the system for recruiting straw buyers. Resnick, one of the agents, advertised burial insurance and then persuaded consumers who responded to the ad to buy life insurance instead.

Another, Kergil, falsified documents for an 86-year-old woman who had responded to an ad for life insurance. The application stated that she had a net worth of $ 4.65 million, when in fact she was living on Social Security checks of about $ 1,485 a month and her total net worth was much less than $ 500,000. By participating in the deal she would receive between $ 20,000 and $ 100,000 when the $ 2 million policy she bought was re-sold.

These are classic elements of STOLI schemes, says Stephan r., a life insurance expert Leimberg and president of Leimberg Information Services, a publishing and software company. For more than five years they have proliferated with the vibrancy of the secondary insurance market, he explains; agents get one commission when they first issue the policy, and another when they resell it.

But in a number of respects the latest case is unusual, the criminal charges have been Leimberg adds: brought; the insurance agents have been arrested; the FBI is involved; and obstruction of justice, charges have been filed. As federal authorities got wind of what was happening, the agents allegedly destroyed documents and computer files.

2012 Forbes.com LLC ™ All Rights Reserved

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Too Strapped for Cash, Many Consumers also Lack Longevity, Life Insurance

                   With age comes wisdom supposedly, but even as more Americans are living longer they are not financially prepared for their retirement years and also lack life insurance.

According to the Centers for Disease Control (CDC), the average life expectancy has increased to American's 75.7 years for men and 85.7 years for women. Of those age 65 and coupled, there is a better-than-even chance of one partner will live to age 94, and one-of-10 couples will have a partner that lives to 100 or more.

Unfortunately, a new study finds that while Americans are living longer, almost half are concerned that they are not financially prepared to live into their 70s, 80s and 90s.

Can't afford to live ...

The "Longevity and Preparedness Study," conducted by Northwestern Mutual, asked people how financially prepared they feel to live to age 75, 85 and 95 and that only slightly more than half studies (56 percent) feel financially prepared to live to the age of 75. Fewer than half (46 percent) feel financially prepared to live to age 85; and only about one-third (36 percent) feel prepared to live to age 95.

"These findings underscore that there is room to further educate clients — not only with respect to increasing longevity, but also more broadly about the value of long-term planning," said Greg Oberland, Northwestern Mutual EVP. "So we, as an industry, must emphasize that the plan is as important as the goals. And that plan is like a roadmap that helps clients stay on course. "

According to the research:

• Women live five years longer than the average men and feel less financially prepared to live longer lives.

• Men regardless of age are significantly more likely than women to feel financially prepared to live to age 75 (65 percent vs. 48 percent), 85 (55 percent vs. 37 percent), and 95 (43 percent vs. 30 percent).

• Younger Americans (25-59) feel less prepared than older Americans (60) to live to 75 (47 percent vs. 79 percent), 85 (37 percent vs. 66 percent), and 95 (29 percent vs. 52 percent)

"No matter what age you'll live to, it's important to protect the dollars you'll eventually depend on to provide an income in your retirement years," Oberland said.

Can't afford to die ...

The findings of the Study "The Insurance Barometer," an annual study conducted by the Life and Health Insurance Foundation for Education (LIFE) and the Life Insurance < http://www.lifehappens.org/=""> > and Market Research Association (LIMRA) to better understand the < http://www.limra.com/=""> > public's opinions, attitudes and behaviors regarding life and health insurance are separate but consistent with the "Longevity and Preparedness Study."

The study found that almost one-third of respondents believe they need more life insurance; that number includes 20 percent of current policyholders and about half with no coverage.

The two most cited excuses for not purchasing adequate amounts of life insurance are that it is simply (83 percent), and that they have other financial priorities (85 percent).

Respondents were asked to estimate the annual costs of a 20-year level-term life policy for a 30-year-old and shot wildly over the cost at $ 400, guessing. Younger adults, those most likely to qualify for preferred pricing, overestimated the actual cost of $ 150 by a factor of seven.

"Our research has suggested for years that consumers believed they couldn't afford life insurance, yet they had no idea how much it actually cost," said Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global to INN. "This is the first study that quantifies the wide gap in clearly consumers ' understanding on the affordability of life insurance."

The cost of basic term life insurance has fallen by about 50 percent over the past 10 years, Feldman, CLU, ChFC, is Marvin, president and CEO of the RFC, the LIFE Foundation.

"We know these misconceptions are hindering people from taking steps to get the coverage they need. In essence, life insurance is falling down the priority list, "Feldman said.

According to the study, many are more concerned with paying their mortgage or rent (31 percent), or losing money on investments (26 percent) than with buying life insurance. Interestingly, saving for retirement continued to be the top financial concern (50 percent).

As the U.S. economy recovers, the insurers have an opportunity to help consumers Butterfly their investment and retirement strategies to ensure they have enough money set aside to maintain the life they're accustom to and to fund new plans, Feldman observes.

"We want companies and producers to better understand the consumer attitudes and perceptions that are contributing to the gap in coverage that exists today so that they can better respond and help us educate the public about the importance of financial protection and taking personal financial responsibility," Feldman said.

Technology can play an important role in those educational efforts by creating direct access to quality information and pricing.

"We need to engage younger generations — who live online — more creatively, using the platforms and technology they use in their day-to-day lives, to convey this information so that they know that they can afford the life insurance their family needs," Kerzner said. "While we have seen some insurers begin to advertise the price of their products in their marketing materials, and others place quoting tools more prominently on their websites to better educate consumers, all insurers should take a look at how they can make it easier for consumers to access this vital information and better understand the real cost of life insurance."

© 2012, Insurance Networking News and SourceMedia, Inc. All Rights Reserved.

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Choose an Insurance Agency for Your Coverage Needs

                      Whether you are new to the subject or experiencing a particular life change, insurance coverage options can be overwhelming without proper guidance. Insurance brokers can help with issues as varied as getting homeowners insurance for the first time to selecting coverage for your family, your parents and other loved ones. Health insurance is far from easy to understand for many people, and working with an experienced insurance agency can help you make choices that result in peace of mind as well as proper coverage.

As insurance in general is not a straightforward proposition, virtually no question is likely to be considered unnecessary. Even the type of pet you have may affect whether or not your home will be insured, as well as the amount of your policy and what exclusions may apply. Questions regarding insurance claims and deductibles can be answered by your insurance broker, and the knowledge you gain will likely come in handy if you ever do feel the need to file a claim due to theft of property or damage to your home. Insurance may be required in many instances, but considering the premiums you pay your insurance should also work for you.

Car insurance is another coverage issue that can be frustrating to deal with, especially if you are unaware of what goes into determining the insurance quotes you receive. It often takes more than what you may consider to be a good driving record to get a low rate, and brokers can help you understand automobile insurance complexities. You may decide with confidence whether you are better off with basic coverage that is required by the state or getting significantly higher coverage amounts that may account for virtually any accident scenario after speaking with a competent insurance professional.

As a carefree young adult you may scarcely give life insurance any thought, but life changes and experiences may make this subject important to you very quickly. Your own marriage, parenthood, or family situation involving ill or aging relatives may require a sensitive and comprehensive approach to selecting the right coverage. Having an experienced insurance agency that you can count on to give you expert advice may be invaluable as you consider your options. While your final insurance choices may take a good deal of thought and planning, working with established insurance brokers can ensure that you have solid and worthwhile policies that thoroughly reflect your needs and preferences.

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Visitor Medical Insurance - An Essential Tool

              The US attracts a good number of visitors every year. Being one of the most developed nations in the world, America offers a wide opportunity for people in search of Job, Profession... Staying in the US for a short period might be a thrilling experience for the visitors who are from different parts of the world. Though, they need to get accustomed to the diverse food habits, lifestyle and climate conditions. Visitors should do a proper home work before starting their journey. Visitors should be aware of the essential tools that will be useful while in the USA. Insurance is one of the important tools that visitors cannot do away with while residing abroad even for a short period. Medical emergencies in the US demand a proper medical insurance cover for the victim; else there are chances of financial shortcomings.

Domestic health insurance plans in America are applicable only for the permanent residents of the US. Therefore visitors need to get covered under medical insurance specially designed for them. Private insurance companies in the US have designed exclusive insurance plans called as visitor medical insurance for the new immigrants or visitors. These plans are customized to suit the various age groups of the visitors. Visitor medical insurance can be purchase even while the visitor is still in the hoe country or even after landing in the USA.


Where can travellers shop for visitor insurance? Things have become simpler and faster in the web world. Visitors can access visitor health insurance at American Visitor Insurance. There is no need to waste time or do any paper work to access the quotes of visitor insurance plans. All a traveller expected to do is, spare few minutes and compare visitor medical insurance offered by prominent insurance providers in America. Visitors can enter their age group and make a quick comparison of visitor medical insurance quotes. By using the compare tool for visitors insurance, travellers can access the benefits, deductibles, co insurance, coverage period, special features... of visitors insurance plans.


Visitors medical insurance have exclusive benefits and some of them are hospitalization expenses, emergency medical evacuation, repatriation of remains, accidental death and dismemberment... However, most of the visitors insurance providers will not cover pre existing medical conditions in the plans offered by them. How does one know about pre existing conditions? It is purely dependent on the doctor's report, whether a person has pre existing conditions or not. Even if the visitors ignore to mention the pre existing condition, at the time of medical emergency it will be revealed. Learn the nuances of visitor medical insurance online and make an informed choice. Visitors can make an online purchase of the plan they select at American Visitor Insurance using a credit card.

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