Career Development » Insurance Training

Insurers Mandated to Credit ObamaCare When Giving Rebates

seo.team — Wed, 23 May 2012 06:51:33 +0000

Health-insurance providers are obligated to inform clients who receive a premium rebate this summer that the check is made possible by the Obama administration’s healthcare law, so require federal guidelines released this May.

According to the healthcare law—whose fate hangs in the balance as the Supreme Court deliberates on its validity—insurers that have not spent on actual medical care—vis-à-vis administrative costs—must give the difference back to customers. Kaiser Family Foundation, which has no stake in the healthcare-law debate, has projected refunds of about $1.3 billion going to approximately 16 million people who have purchased their own policies or have obtained them through an employer.

For insurers—as well as for insurance professionals who already have a life insurance continued education or life insurance CE—ObamaCare lays down a good foundation not just for those with inadequate access to healthcare services but also for the insurance industry that can help provide it.

Kaiser said checks for those with insurance through a large employer would average around $72, while checks for those who bought their own policies would average $127.

The Department of Health and Human Services has already come out with the rules on how the insurers would officially inform the rebate recipients. Specifically, the first paragraph of the mailing would read: “This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums. This rebate is required by the Affordable Care Act-the health reform law.”

Survey: Americans Feel Unprepared About Old Age

seo.team — Wed, 23 May 2012 06:51:24 +0000

It appears that for many Americans it isn’t the right time to be old. That’s the take-away from a survey, the “Longevity & Preparedness Study,” recently completed by Northwestern Mutual, a mutual company offering financial services, including life insurance.

The study endeavored to determine if the adults polled believed they were financially ready to live to ages 75, 85, and 95 and found a few surprises: only a little over half (56 percent) thought they were financially prepared to live to the age of 75; fewer than 46 percent believed they were financially prepared to live to age 85; and just a third (36 percent) felt financially secure to live to the grand old age of 95.

The poll results point to a new opportunity for insurers—and, of course, for insurance professionals who already have a life insurance continued education or life insurance CE—to exploit as U.S. adults look to better care in their old age.

The survey also found that:

On average, women live five years longer than men and feel less financially secure to live to an advanced age.
Regardless of age, men are statistically significantly more likely than women to feel financially equipped to live to age 75 (65 percent vs. 48 percent), to age 85 (55 percent vs. 37 percent), and to age 95 (43 percent vs. 30 percent).
Younger Americans (ages 25 to 59) feel less ready than older Americans (60 ) to live to age 75 (47 percent vs. 79 percent), to age 85 (37 percent vs. 66 percent), and to age 95 (29 percent vs. 52 percent).

“These findings underscore that there is room to further educate clients—not only with respect to increasing longevity, but also more broadly about the value of long-term planning,” remarked Greg Oberland, an EVP with Northwestern Mutual. “So we, as an industry, must emphasize that the plan is as important as the goals. And that plan is like a roadmap that helps clients stay on course.”

Gen Y Lacks Disability Insurance

seo.team — Mon, 14 May 2012 13:53:27 +0000

Research done for MetLife, published in the 10th Annual Study of Employee Benefits Trends, has found that only about 50 percent of Gen Y workers (those aged 21 to 31) have income protected by disability insurance. “A disability is not selective—it can happen to anyone, at any time. If you have people who depend on your income—or if you depend on your income—you need disability insurance,” stressed Clea Barth, vice president, Individual Disability Insurance for MetLife.

For insurers—as well as for insurance professionals who already have a health and life insurance license—it is another good insurance line, considering inadequate access to healthcare services for many today.

“MetLife research finds that Gen Y workers are shouldering significant familial responsibilities: 55 percent say they are married or in a domestic partnership, 46 percent are parents of young children, and 13 percent provide care for an elderly parent or relative,” said Barth. “These obligations underscore the importance of understanding how disability insurance can help build a financial safety net so that essential expenses could still be paid if the breadwinner is unable to work due to illness or injury.”

According to a 2012 Social Security fact sheet, nearly 25 percent of 20-year-olds today will become disabled by age 67. MetLife pointed to that statistic as a good reason to take out disability coverage not only because of the high probability of disability but also because of the affordability of disability insurance when one is young and healthy.

In addition, even among those Gen Y workers who have coverage it is not enough to simply have insurance; it is also necessary to ensure that coverage amounts are adequate. MetLife noted that of those surveyed for the MetLife study, 40 percent were not sure what percentage of their income was covered.

Number of Adults Not Getting Enough Healthcare Increases

seo.team — Mon, 14 May 2012 13:53:25 +0000

A surge in unmet medical needs in American adults over the last decade, particularly for those who do not have health coverage, has been reported in a newly released Robert Wood Johnson Foundation study. The report involved adults who were too young for Medicare.

The finding points to a new opportunity for insurers—and, of course, for insurance professionals who already have a life and health insurance license—to exploit as U.S. adults look to better healthcare.

Researchers at the Urban Institute investigated three health-access indicators. They examined if the adults in the study had a routine checkup or dental visit during the year; they also determined if they had unmet medical needs because of treatment cost. To the researchers’ surprise, there was a decline in access to health services from 2000 to 2010 in nearly every state.

The study, for instance, found that 20 percent of adults in California in 2010 had an unmet medical need because of cost, a 5-percent increase during the 2000-2010 period. Sixty percent of adults had a checkup, unchanged in 10 years; and 65 percent had been to a dentist, a decline of 3 percent.

The report also found that nearly 1 in 5 adults nationwide had experienced unmet medical needs, with uninsured adults faring the worst: 48 percent of uninsured adults compared with 11 percent of insured adults.

“This indicates that the health care safety net is not acting as an effective substitute for health insurance coverage when it comes to providing basic health care to the uninsured,” the study’s lead author Genevieve M. Kenney, noted in a statement.

Medicare Quality Insurance Project Questioned

seo.team — Wed, 09 May 2012 13:33:51 +0000

Medicare is bankrolling an $8.3-billion test project that aims to refurbish private health coverage but, according to a government watchdog, has so far failed to reward quality insurance plans. The three-year project is considered the largest-scale test of an initiative to improve the quality of Medicare services to date.

The watchdog, the Government Accountability Office (GAO), has recommended canceling the Medicare Advantage quality bonus payment initiative—a move that would not sit well with insurance professionals who already have a life insurance continued education or life insurance CE. It suggested in its report that the U.S. administration should instead focus on quality improvement measures under the Patient Protection and Affordable Care Act, President Obama’s healthcare reform law.

The GAO report questions Medicare’s capability to enhance care delivery, bring down costs, and reduce waste given its cost, $523 billion-a-year, and a Congress that seemingly is bent on reducing the federal debt and deficit.

For its part, the government came out with a report claiming that the Medicare program would save more than $200 billion through 2016 because of Obama’s reforms.

The two reports represent an ongoing contest between the administration and its critics to win the public sentiment over government involvement in healthcare, as the Supreme Court deliberates on the fate of the overhaul law, with a ruling expected in June.

Workers Lack Disability Insurance

seo.team — Wed, 09 May 2012 13:33:47 +0000

A recent survey by the Consumer Federation of America, a nonprofit alliance of consumer groups supporting the expansion of employer-provided disability insurance, and Unum, a provider of employer-provided insurance, found that two-thirds of private-sector employees don’t have disability insurance even though the workers said that missing work for three months would mean certain financial distress. The survey involved close to 1,200 workers.

Significantly, the survey pointed to disability insurance, a relatively neglected insurance area, as a good line to consider for insurers and for insurance professionals who already have a life insurance continued education or life insurance CE.

Stephen Brobeck, the federation executive director, noted that all employers should offer their workers the chance to buy disability insurance if only to give them a financial safety net. Brobeck explained that disability insurance “complements and supplements” programs such as workers’ compensation coverage and Social Security disability insurance, which are insufficient by themselves. “Workers need better protection,” he said.

Statistics from the Council of Disability Awareness that the report quoted, showed that 90 percent of all disability claims are not for injuries but for common illnesses and health conditions. According to the Society of Actuaries, an individual who becomes disabled for 90 days will on the average have an actual disability period of two years.

Brobeck pointed out that workers’ compensation coverage is important, but it is only for workers who become ill or are injured on the job. Unfortunately for the worker, most illnesses or injuries that result in work loss happen outside the workplace. In contrast, disability insurance compensates for lost income resulting from injury or illness away from work.

Variable Annuities Becoming Popular Retirement Income Solutions

seo.team — Thu, 26 Apr 2012 16:10:26 +0000

According to a survey by AllianceBernstein L.P. and the Insured Retirement Institute (IRI), consumers and financial advisors are finding variable annuities (VAs) providing answers to their financial security concerns as demand for nonvolatile, guaranteed income increases.

“The fact that fewer people today feel confident that they will be able to meet their financial needs in retirement is driving a robust market for lifetime income solutions,” observed IRI president and CEO Cathy Weatherford. “Our survey found that more and more financial advisors are turning to VAs as a sound portfolio solution because they provide guaranteed income and can help clients attain financial security in retirement.”

VAs represent a new opportunity for insurers and for insurance professionals who already have a life insurance continued education or life insurance CE, and it points to more robust business in an industry that’s only just emerging from crisis.

The new appetite for stable retirement income was shaped in large part by the 2008 financial crisis, which forced many consumers to look for alternative solutions that guaranteed a retirement income.

“Clients clearly have a strong appetite for the benefits of variable annuities, and it is important that the industry better communicate how they can become a key portfolio ingredient,” said Michael Hart, managing director of Insurance Services at AllianceBernstein.

Key findings of the study include:

50 percent of respondents said they started recommending VAs more because their clients are demanding “guaranteed investments.”

57 percent of respondents said they increased their use of VAs because the “designs have become more attractive.”

60 percent of sellers have increased their recommendations for VAs since the credit crisis.

Stable-value Products Capturing Business

seo.team — Thu, 26 Apr 2012 16:10:16 +0000

New York Life has found that half of retirement-plan policy holders prefer stable value products, low interest rates notwithstanding. A good line to consider for insurers and for insurance professionals who already have a life insurance continued education or life insurance CE.

“Since the financial crisis of 2008, on average more than 20 percent of retirement assets have been invested in stable value investments and half of all participants across New York Life’s retirement platform have some 401(k) savings within a stable value investment today,” reported Steven Dorval, New York Life’s managing director of retirement and investment strategy.

New York Life started working with stable-value plan sponsors in 2010, buying wrap contracts that guarantee the principal on a fixed income portfolio. “The wrap contract is a return home for insurance companies. We were the early providers but lost the lead to bank holdings who offered lower margins. Insurers are back now in their natural role as guarantors.”

Pricing for the cost of a wrap contract before 2008 was .05 to .08 basis points, but has gone up since then to .20 to .25 percent basis points.

Stable-value funds now yield two percent or more, a clear win for investors who can enjoy return sans the volatility. “That’s a significant increase over money markets,” noted Dorval.

New York Life observed that it isn’t just the baby boomers who are interested. Although they make up 58 percent of stable-value use, Gen X and Gen Y come close at 46 percent and 32 percent, respectively.

Study: 75 Percent of Workplace Shoppers Buy Life Insurance

seo.team — Fri, 20 Apr 2012 14:44:40 +0000

LIMRA, an international association of insurance and financial services companies, recently released a study showing the insurance buying habits of Americans. The study results found almost 20 percent who shopped for life insurance actually shopped in their workplaces for the right policy, and 75 percent of workplace shoppers eventually purchased life insurance.

That’s good news for insurers and for insurance professionals who already have a life insurance continued education or life insurance CE because it points to more robust business in an industry that’s only just emerging from crisis.

“More and more people are turning to their place of work to get the financial products they need,” stated Kim Landry, an analyst for LIMRA Group Product Research. “Clearly, the convenience of having the resource at their place of work coupled with the feeling of security felt by working with someone their employer has [implicitly] approved, are drawing consumers to this channel.”

Of the workplace shoppers for life insurance products, 30 percent said they shopped in their workplace because the product was offered to them at work. LIMRA revealed that in the workplace, life events such as a change of marital status or a new baby are two of the most popular reasons why workplace shoppers look for life insurance.

The LIMRA study revealed that workplace shoppers are often female (55 percent), that more than 75 percent are married or living with a partner, and that most have kids under 18 at home. Significantly, the study found that workplace shoppers are likely younger, have higher average incomes, and tend to have more investable assets than those who shop outside the workplace.

Life Insurance Activity Up 4.2 Percent

seo.team — Fri, 20 Apr 2012 14:44:30 +0000

Application activity in the United States for individually underwritten life insurance steadied in March at -0.3 percent year-over-year (all ages combined), but was significantly up from both the March 2011 level and the February 2012 level, according to the MIB Life Index. Food for thought for insurers and for insurance professionals who already have a life insurance continued education or life insurance CE.

The MIB Life Index is the life insurance industry’s regularly updated measure of application activity in the country. The index derives from the number of searches MIB life member company underwriters make using the MIB Checking Service database.

First quarter results were robust, improving 4.2 percent year-over-year, the industry’s best start in five years. Interestingly, the application activity in March fell 4.5 percent from the February level.

Life insurance application activity by age group represents the Life Index composite results for month and quarter. March results for ages 0-44 slid 2.1 percent; ages 45-59, no change; and ages 60+, rose 5.2 percent, year-over-year. The first-quarter growth cut across all age ranges: 0-44, up by 2.4 percent (largest increase since Q1 2002); 45-59, up 3.5 percent (largest increase since Q4 2009); and ages 60+, up 11.5 percent year-over-year (largest increase since Q1 2010).