2024 0408 - WinkIntel - And Yes, Life Insurance Illustrations are Broken for All Types of Life Insurance, by Sheryl J. Moore

  • 2024 0408 - WinkIntel - And Yes, Life Insurance Illustrations are Broken for All Types of Life Insurance, by Sheryl J. Moore  ---   [BonkNote]   ---  [link]
    • Given this experience, I take issue with Elan Moas‘ position on UL.  Click HERE to read 2024 0408 - ThinkAdvisor.com - Clients With Universal Life Need Performance Updates: Elan Moas, By Allison Bell
    • I also take issue with a few points in this article.
    • More than anything, I SERIOUSLY take issue with the citation that “ninety percent of these policies will never pay a death benefit.” WTH did that statistic come from? – SJM
    • Comment: Philip Polkinghorn - If you adjust premium at each change in credited rates you should not crash. Insurance is for low frequency and high severity events. If only 10% of houses burned down , would you not insure your house?
  • [Bonk: Connect:  Richard Weber, Adam Sosnick, Daniel Gottlieb and Kent Smetters, and 1871-1, NAIC Proceedings and 1871-2, NAIC Proceedings]
  • 2023 0524 - Michael Sartain - 86. Adam Sosnick - The Michael Sartain Podcast - [VIDEO-YouTube-03:47:13]
    • 54:04-57:15 - Adam Sosnick - The Dirty Little Secret of Life Insurance is that 90% of Life Insurance Policies never pay out.
        • Okay... we are in Las Vegas, so you will get this analogy: The House Always Wins."
  • 2023 1130 - NAIC Proceedings - NAIC/Consumer Liaison Committee - 21p
    • 9. Heard a Presentation on How Much Life Insurance Purchased in the U.S. Becomes a Death Claim
      • Richard Weber (Consumer Representative) provided a presentation based on the paper Lapse-Based Insurance, published in 2016 and updated in 2021.
        • The paper was written by David Gottlieb (London School of Economics and Wharton School, University of Pennsylvania) and Kent Smetters (Wharton School, University of Pennsylvania).
        • 2016 - AP - Lapse-Based Insurance, by Daniel Gottlieb and Kent Smetters - 83p
        • 2021 (Update) - AP - Lapse-Based Insurance.  American Economic Review, 111 (8): 2377-2416, by Daniel Gottlieb and Kent Smetters - 101p
      • Weber said most individual life insurance policies lapse before expiration.
        • Weber said over 70% of U.S. families own life insurance, and annual premiums exceed $110 billion.
        • Weber said between 1990 and 2010, there were $30.8 trillion in life insurance issued and $24 trillion in life insurance lapses.
        • Weber said 25% of permanent insurance policyholders lapse within just three years of first purchasing their policies, and 40% lapse within 10 years.
        • Weber said nearly 88% of universal life policies ultimately do not terminate with a death-benefit claim, and almost 85% of term policies fail to pay a death claim.
  • 1871-1, NAIC Proceedings, (fka National Insurance Convention)  ---  [BonkNote]  ---  233p
    • E. W. Peet, Secretary of the National Life Insurance Company of the United States - The experience of most companies shows that about  one half of the policies lapse within ten years from the date of their issue; and probably not more than one-quarter of the policies issued in any year will be in force at the end of twenty years.
  • 1871-2, NAIC Proceedings (fka National Insurance Convention)  ---  [BonkNote]  ---  657p
    • Julius L. Clarke, Insurance Commissioner, of Massachusetts -: I don't know as to that. I know that the managers of four or five New York companies, have stated that their hope of success and profit, rested in the number of lapses which would accrue in a given year.
    • George W. Miller, Superintendent of the New York Insurance Department - Then there must be something vicious behind the lapses.