In what appears to be a screeching halt to the bottoming out of term insurance prices, several companies moved within the past month to unseat perennial term insurance giant Banner Life, a subsidiary of Legal and General America.
Banner responded today by lowering rates in their three best rates classes, preferred plus, preferred and standard plus. This not only recaptures their top spot with the squeaky clean cases that garner preferred plus rates, but also puts them in a stronger position to fight for impaired risk life insurance business since they do table rating off of their standard plus rate class.
From the Banner press release, “Perhaps more important than the change itself is the spirit in which we make it. Like most term companies, we’re intensely competitive. And many have worked behind the scenes at Legal & General America to ensure that we’re in a pricing position to profitably make such a response, and keep it simple. Pure term.”
Their comment about pure term is important in light of the path most companies have taken to try to keep prices low or lower them more. The advent of Term/UL is the most common competitive move of late. In most cases term/ul is a good alternative to term with a few caveats. Make sure your agent knows the product or you could have problems down the road. First, be clear that there is no conversion option. Most of the products have a guaranteed term period and then a guaranteed UL period after that. Some companies have made the level UL period a decent offering while others like West Coast Life price it like they are want to scare you away. Also understand that you can’t lower the face amount of a term/ul product without incurring a surrender charge. You also can’t replace your policy with a larger one and expect a refund of unused premium.
Banner is sticking with a pure term insurance policy with conversion options to lifetime guaranteed products. This is more than just a rate change, which we all like. This is Legal and General America making a statement about term life insurance and its’ inherent strong attributes. No weaseling around figuring out how to game the system and give inferior products to their clients. Instead it’s, “to ensure that we’re in a pricing position to profitably make such a response”. They aren’t just flailing away at the challenge the way Protective and West Coast Life are. They’ve studied it and know that they are solid ground.
Bottom line. Banner is a top notch company that is determined to be the first and the best choice for as many people as possible. If you have any questions about their new rates or how term stacks up against term/ul, email or call me directly.