- <Mr. Lovendusky - ACLI> said:
- the ACLI work group thinks that most confusion for consumers involves complex products like universal life, and not Simple products like term life.
- He said consumers are mostly confused about options, guarantees and riders.
- The ACLI work group was considering asking the life insurance and Annuities (A) Committee to narrow the charge to look at only products with options, guarantees and riders...
- but Ms. Cude said she thinks that it is important to consider how the disclosures for all products could be improved.
2016 0403 - LIIIWG Conference Call, NAIC Proceedings
We also became more aware of the exercise of policyholder options.
- This was not just through surrenders of annuities but also through options that we thought were safe, such as policy-loan provisions in ordinary life policies with fixed interest rates of 5% or 6%.
- I remember Sylvia Porter, the financial columnist, writing about borrowing against your life insurance at 5% or 6% fixed interest and investing in a money market account at 15% interest.
- Insurance companies experienced a cash-flow squeeze as money flowed out through the policy-loan feature.
- There were some company failures at this time; Baldwin United was one of the most prominent.
- Other companies suffered lesser degrees of financial stress.
-- DENNIS L. CARR