Another carrier has announced that they will no longer distribute life insurance products as of December 31, 2019. TIAA Cref, Hartford, Voya, and Transamerica have all taken steps in 2019, to reduce their new life insurance product offerings and exit this arena. At First Western Trust we understand that life insurance may be a big part of your connected financial portfolio and want to ensure that you are aware of the changing landscape in this market.
Anytime an insurance company makes a major change, policy holders should work with their independent insurance advisor to review their current coverage and determine what is in their best interest going forward with their policies. Our Insurance and Risk Management Team of Catherine Runge and Garrod Moltz, led by Don Silversmith, are ready to go over your options.
With the exit of many of these companies, there are several things you will want to consider:
- Performance: When companies discontinue their life insurance products, they no longer have the need to stay competitive in the market with enhancements or new features. Often times you will see a drop in crediting rate, impacting the performance of products. As a policy owner, it is suggested that you work with your independent insurance advisor more frequently to review performance and ensure that the product is still aligned with your goals.
- Section 1035 Exchange: A provision created by the Internal Revenue Service (IRS) that allows a contract or policy owner to trade one product for another with no tax consequences. Underperforming or outdated products can be exchanged for newer products that may be better investment options with more attractive features and less restrictive provisions.
- Customer Service: Many companies that discontinue their life insurance business find it difficult to retain and recruit top level professionals to service a closed block, therefore you will want to carefully monitor the service you are receiving.
- Business Continuity: Ensure that the carrier exiting out of the business does not plan to sell its block to a third party.
Our team is committed to delivering regular reviews to ensure that our risk management services continue to help achieve your overarching goals. We incorporate insurance and risk management solutions into your overall wealth plan. In doing so, we help your family reach your goals for each dimension of your wealth. Part of this process is assessing your options. When looking at different life insurance carriers there are many things to keep in mind:
- How long has the carrier been in the business line?
- Does the carrier have a strong, successful history?
- Are their products and distribution strategies scalable?
- How competitive is their history of inforce performance and managing non-guaranteed policy elements?
We recommend that clients meet with their independent insurance advisor anytime they have a policy with a company that has announced major changes that could impact policy performance or service.
Many do not consider life insurance as a tool to help accomplish strategic financial goals. Partnered with our ConnectView® approach and experienced team, together we can create a holistic plan that supports your vision for life.