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Actuarial:
Oct 11 2006
PREMIUM INCOME
Rates continue to slide steadily downwards
Premiums for individual life insurance in the US will fall by 4 percent in 2007, predicts the Insurance Information Institute (III). This decline is expected to be seen in universal life products, which pay a death benefit no matter when the insured person dies, and term life products. A 4 percent decline would be in line with the average 5 percent per year drop since 2000 and continue a trend that began several decades ago, said III economist Steven Weisbart.
He explained that life insurance rates are dropping because death rates for the 25 to 44 age group – the primary age range for purchasing life insurance – have decreased significantly over the past ten years.
Weisbart noted that in 1996 the death rate per 100,000 for the 25 to 44 age group was 177.8; by 2004 it had dropped to 161.8, based on preliminary data from the National Vital Statistics Reports.
“That is nearly a 10 percent drop in the death rate in less than a decade for the prime insurance-buying ages,” he stressed.
The result is that, in 2006, premiums are less than half of what they were just over a decade ago.
Providing an example of expected premiums for term policies in 2007, the III said it estimates that the annual premium for a 40-year-old male non-smoker buying a $500,000 20-year level term life insurance policy will be $615 if he qualifies as a “standard risk” and $340 if he meets the more stringent requirements of a “preferred risk”.
Rates for women, younger people and for larger amounts of insurance would be lower.
Rates continue to slide steadily downwards
Premiums for individual life insurance in the US will fall by 4 percent in 2007, predicts the Insurance Information Institute (III). This decline is expected to be seen in universal life products, which pay a death benefit no matter when the insured person dies, and term life products. A 4 percent decline would be in line with the average 5 percent per year drop since 2000 and continue a trend that began several decades ago, said III economist Steven Weisbart.
He explained that life insurance rates are dropping because death rates for the 25 to 44 age group – the primary age range for purchasing life insurance – have decreased significantly over the past ten years.
Weisbart noted that in 1996 the death rate per 100,000 for the 25 to 44 age group was 177.8; by 2004 it had dropped to 161.8, based on preliminary data from the National Vital Statistics Reports.
“That is nearly a 10 percent drop in the death rate in less than a decade for the prime insurance-buying ages,” he stressed.
The result is that, in 2006, premiums are less than half of what they were just over a decade ago.
Providing an example of expected premiums for term policies in 2007, the III said it estimates that the annual premium for a 40-year-old male non-smoker buying a $500,000 20-year level term life insurance policy will be $615 if he qualifies as a “standard risk” and $340 if he meets the more stringent requirements of a “preferred risk”.
Rates for women, younger people and for larger amounts of insurance would be lower.
Funding received by the UK’s Actuarial Profession’s Continuous Mortality Investigation (CMI) research organisation from a number of companies of consulting actuaries in July will permit it to continue its groundbreaking work in the field of mortality experience of pensioners in self-administered pension schemes (SAPS)...
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While most companies in the UK are confident of overcoming pension deficits, issues such as increasing longevity and uncertainty posed by volatile and unpredictable investment returns could see a growing number turn to buy-outs by insurers and other investment vehicles as an attractive escape ...
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Total medical costs for an average American family of four belonging to a preferred provider organisation medical care programme will total $13,382 in 2006, up 9.6 percent from 2005, according to actuarial consultancy Milliman. Though this is the lowest rate increase in seven years, it continues a trend of medical costs outpacing the rise in the general cost of living by a wide margin and brings the compound annual average increase since 2002 to 9.7 percent.
The first new mortality tables published by the UK’s Actuarial Profession since 1994 reflect the uncertainty surrounding future mortality experience. Unlike previous sets of tables that have incorporated projections of future mortality, this has not been done with the new 00 Series of mortality tables.
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Marketing and research organisation Limra International’s survey of first quarter 2006 US individual life insurance sales reveals sales of $2.7 billion, up 15 percent compared with the corresponding period in 2005.
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Prudential’s and Legal & General’s ( L&G) dominance of the UK’s bulk annuity market is set to be challenged by at least four new entrants. All are targeting a slice of the multi-billion pound market in pension liabilities of companies no longer prepared to carry the responsibility for defined benefit (DB) schemes and insurers exiting the sector...
From a customer’s perspective buying long-term care insurance early in life holds big attractions, stresses the American Association for Long-Term Care Insurance (AALCI). Based on data provided by eight long-term care insurers representing 80 percent of new individual policies sold in the US, the AALCI said the average annual cost for a 55-year-old buying long-term care insurance in 2005 was $772, almost half the $1,456 for a 65-year-old.
Most European insurers are embracing the upcoming European Union’s Solvency II regulations with enthusiasm, a survey conducted by consulting and technology services group Accenture has revealed.
With the ink hardly dry on an agreement reached with the government by South Africa’s five largest life insurers to repay ZAR2.63 billion ($420 million) to aggrieved annuity customers, the companies are again running foul of pensions fund adjudicator Vuyani Ngalwana.