Is Your (Client’s) Policy Stuffed with Charges?

The largest cost in any insurance product is the cost of paying claims. Payments of claims are referred to as the Cost of Insurance or COI. For most types of insurance, paid claims are the largest single cost factor. With life insurance, COI charges can account for 75-85% or more of the total premium. Experts say the range between best-available rates and terms on one end of the pricing-spectrum versus poorly-priced products on the other end of the spectrum is approximately 40% on either side of average costs.^[1] Do you have clients who do not know what they are actually being charged for cost of insurance charges (COIs)? Would you know if the costs of your (client's) policies have been increased?

The National Association of Insurance Commissioner (NAIC) reports that 62% of people who own life insurance do not really know what they have or why they bought it.^[2] In order to reassure your clients that they made the appropriate choice in life insurance products and/or reveal when there are opportunities for improvement, it is important to inspect what you expect out of our client’s life insurance portfolios. Use the Policy Pricing Calculator to find the cost representative of an average product. If you find that an in force or proposed policy does not compare favorably to the benchmarks, then contact one of our Insurance Banking® Centers or contact us directly and we can refer you to the Insurance Banking® Center nearest to you.

If you would like more information about product pricing for a particular client, use the Confidential Policy Evaluator (CPE) Research Reports to reveal what your clients are being charged for cost of insurance charges (COIs), fixed administration expenses (FAEs), cash-value-based “wrap fees” (e.g., M&Es) and premium loads, and what they are getting in performance of invested assets underlying policy cash values. Click here and get up to 3 Confidential Policy Evaluator (CPE) research reports under our NO-RISK trial subscription.