Following up on my post yesterday about Voya Life Insurance’s decision to do away with all of their guaranteed term and universal life products and in recognition of their self declared 2016 Most Ethical Company status, I have just a few more points that I think are important to consider. These points were not only missed or ignored by Voya, but as I mentioned there are other life insurance companies poised to follow in the wrong foot prints, to take the wide easy path to their self centered security.
- I mentioned yesterday that the policies or products that Voya is now claiming are unsustainable in this low interest, volatile market environment were created and approved by the company, their actuaries and the NAIC, National Association of Insurance Commissioners in the same environment. There is nothing new on the board that wasn’t here 15 years ago and Voya has not only been satisfied with their products during that period but has been consistently lowering their rates to stay competitive. They have gone so far in their quest to keep prices low and competitive that they have contracted with big on line agencies equipped to sell hundreds of thousands of their guaranteed products. Even with the cost low they paid higher than normal commissions to agents and high commissions and bonuses to on line agencies.
- The other option that was ignored over just sacking all the guaranteed products, if they truly weren’t profitable, was to simply raise the price. Every industry out there uses this overtly bait and switch method to gain market shares. They introduce products at a price that is barely profitable and then when they have the interest in the product they raise the price or reduce the size like some of my favorite candy bars. The point is that Voya Life wasn’t losing money on these products, but that the non guaranteed products that are left are insanely over priced and since they aren’t guaranteed they favor the company making huge profits without paying out death benefits. If you take the quest for insanely high profits out of the equation then it makes perfect sense to simply raise the rates on their fully guaranteed term life and universal life insurance products. They then remain profitable and give customers prudent choices for their life insurance protection.
Bottom line. Voya isn’t just shooting themselves in the foot, but screwing their future customers out of choices that meet their needs. I would go so far as to say that no one, and I truly mean no one, would be well advised to buy life insurance products with no guarantees. You might as well just hand over all the money you are about to lose and inform your family that the life insurance you have will likely not be there in the near future. If you have questions about Voya Life’s self centered and stupid move, call or email me directly. My name is Ed Hinerman. Let’s talk.