Ed Hinerman On Life Insurance

Equitable Life learns how to play Pacman!!!!!!

This, for me, just falls into the “go figure” category. Two of the best companies from a product and underwriting stance, MONY and US Financial, were purchased within the last year by AXA Equitable. For a while nothing changed and then snap (my imitation of Pacman), MONY is gone. And now snap again. By mid July US Financial will no longer exist.

US Financial was the innovative “clinical underwriting” company that shook everything up by announcing to the world that clients should be underwritten based on their own merit and not just thrown into the same bucket as say, every other person who has had a heart attack or every other person who had type 1 diabetes or type 2 diabetes. Thye were the company that made compliance and control the issue rather than the disease. They were the company that rewarded people for doing the right things. Well, the AXA has fallen on that kind of logical thinking and underwriting.

AXA Equitable. The 800 pound gorilla smashes another perfectly good company.

MONY was a great company in their own right. While they weren’t exactly clincical underwriters, they were somewhat disposed to fits of common sense. What a breath of fresh air that is, or was, in the life insurance business. They weren’t afraid to make the right decision even when if went just a little askew of what reinsurance companies would like to see. They were a great company for private pilots.
Again, the 800 pound gorilla does it’s job. Smash the competition. If you can’t beat them with products and rates, buy them and close them down.

It’s frustrating for me as an independent agent for a couple of reasons. First, two good choices for my clients are gone. Second, AXA Equitable doesn’t have anything worth a flip to offer to fill the void. Truth is their products and their prices kind of suck. That’s why that stupid gorilla doesn’t talk about life insurance.

My prayer, for the good of all life insurance clients out there, is that some other company will see that void and fill it and then stand up to any companies who try to buy them out of business.

Add comment July 2nd, 2007

Private pilots abandoned, then adopted!!

Life insurance giant AIG, American General led the way for years in offering the best deals for private pilots looking for life insurance. They took over the market and dominated for several years……and then they bailed. From my perspective it looked like they had a few claims, some of them worth several million, that they feared was going to somehow collapse their $700 billion dollar empire. They pushed the idea that they were there for pilots and then ran from it at the first sign of checks going the wrong direction for them.

There are other companies that were there before AIG and are still there. Pilots can still find dependable, affordable life insurance through North American, Genworth Life and Annuity and ING Reliastar. It’s not really like these companies stepped in and adopted private pilots. It’s more like when AIG was flaunting low rates, pilots and some agents may have forgotten those companies that had been there for them all along.

There is nothing basically wrong with a life insurance company changing their underwriting criteria, especially in the face of a new or unexpected mortality experience or assumption. Look at all the companies that changed their stance on multiple instances of skin cancer when a study came out showing that multiple instances of basal cell carcinoma or squamous cell carcinoma could lead to a higher probability of melanoma.

It’s certainly OK for these companies to cover their wealthy little behinds. They need to stay wealthy enough to pay claims. It’s just this agent’s opinion that American General over reacted to what they knew was coming. If you try to claim all of a market (private pilots) and don’t expect any of them to die, someone didn’t do their homework up front.

Add comment July 2nd, 2007