by Sydney Presley, Director of Product
It’s the end of the decade, and we thought it appropriate to wistfully look back to see where the ‘twenty-teens’ have brought us. Let’s first remember that when those years started, our industry was recovering from the 2008 financial crisis. LifeTrends launched in 2011, just a year after the start of the decade and, from a product perspective, is traveling through a completely new world. With regulation changes and beyond, we’ve seen some movements on all product lines in the past nine years. Processes have evolved as carriers continue to look for efficiencies and ways to keep up with digital and technology advances. With all the progression, there are a couple of product lines that we think are worth ruminating on in this piece. Many of these shifts brought questions about evaluating products, to which we at LifeTrends have been working to provide solutions.
Trend: Pacific Life was the first to introduce a high-multiplier, high-charge product (PDX) in March of2017. Since then, there has been a surge in like-minded products and accounts.
Solution: LifeTrends advocates for our approach which we have dubbed the “70% Window.” We encourage you to read our reasonings behind the technique from March 2019. This concept helps you check the interest sensitivity of a product by running at the max AG-49 rate, take 70% of that, and then looking at the drop. Additionally, LifeTrends subscribers are able to see a list of the sub-accounts available on each product — some showing to be in the high risk/high reward category. Talks are already under-way to revisit the AG-49 regulation, and we are excited to follow and see what this next decade brings.
IUL Death Benefit Protection
Trend: Unlike their high-multiplier, high-charge, accumulation-oriented brethren, IUL protection products have seen a shift to longer primary guarantees coupled with significantly cheaper premiums.
Solution: In the low interest rate environment, we find our “Bridge Product” sales strategy (April 2019) to be great for bridging the gap between ever-more expensive GUL products to these IUL protection products with life expectancy-level guarantees. LifeTrends subscribers are able to stay updated and see the products that hit all the checks for this useful sales strategy.
Trend: The early part of the decade saw carriers respond to the AG-38 revisions with product changes, leading to shadow accounts and stripped-out cash value. Today, more and more products are adding exit strategies in the form of guaranteed refund options that provide replacement windows for otherwise cashless or close-to cashless GUL products.
Solution: Between 2013 and our blog post (Guaranteed Refund Option Resurgence) in August 2018, we saw six products release with this feature. We have kept an eye on this trend, and today, that number has grown to eight. To learn more, LifeTrends subscribers are able to see the list of these products, as well as their specific refund option details.
Trend: There was a major exodus from the traditional long-term care space during the beginning of the decade. As the decade came to a close, they seem to have found a new some in life insurance riders and hybrid products.
Solution: When attached to life insurance, both options provide protection against the unexpected while also shedding the “use it or lose it” aspect of stand-alone long-term care insurance. LifeTrends has looked at both the rider side (“TLC for LTC,” September 2018) and the hybrid side (“Best of Both Worlds: A Look at Combo Products,” October 2019). In addition, our subscribers have access to a thorough educational piece, an LTC/CI rider grid that gives specifics about all of the riders and a benchmark to dive deeper into the hybrid products.
Trend: As the simplest of the life insurance products, the fast-moving world of term life has seen evolution to when and how products can be converted into permanent life insurance products. Additionally, term has been most affected in the advancement of accelerated underwriting.
Solution: To stay up to date with these changes, both conversion options and accelerated underwriting programs are features that LifeTrends tracks. With products changing multiple times per year, this can be a huge help for our subscribers in staying on top of what is available and relevant in the industry.
To wrap up our look-back, we asked ourselves the question: how much change has there been? At the inception, LifeTrends kept up with 100k data points (or numbers of interest) which seemed like an incredible amount at the time. Today, we filter down our tens of millions of illustrations to bring our subscribers the most relevant information. By the end of 2019, we tracked over 4.3 million data points across 35 companies and over 300 products. Last year had the most data turnover of any year in LifeTrends history, continuously ramping up with roughly 160 new products or reprices. Our clients enjoyed staying on top of every one of these changes with intelligence and solutions.
As we move forward, we suspect the typical cycle of new regulation implementation, compliance, adjustments, and innovation will continue. While the compliance stage of PBR and 2017 CSO tables just came to a close, we will continue to monitor this cycle and keep on top of any changes to come. Our bread and butter is to provide intelligence around the unique and ever-changing product types, and we look forward to providing this for the next decade.