Life insurance industry representatives meet to list their woes
The woes of the U.S. insurance industry are likely to get the notice of consumers, even those that are not so keenly attuned to the world of insurance news. This may be particularly true in the realm of life insurance. The life insurance industry has been facing troubling times in the U.S. and representatives from some of the largest companies in the country met in Washington for the American Council of Life Insurers conference to list their woes. These troubles are becoming so pronounced for some that consumers may soon be bearing their financial burden.
Low interest rates cited as major problem for the industry
During the conference, representatives of the life insurance industry noted low interest rates as one of the most significant problems they are facing today. Some companies are being forced to make pricing decisions on coverage due to lack of information. This often translates into pouring more money into long-term care and annuity plans that were sold several years ago. This is causing a shortfall in terms of profitability in many markets, leading some life insurance companies to abandon these markets for the sake of their financial stability.
Consumers cautioned to be wary with annuity plans
As insurers leave markets and face higher-than-expected costs, the financial burden is likely to trickle down to the consumer. With interest rates being as low as they are, and showing no signs of changing, the life insurance industry is looking to make gains in the short term. Those looking into annuity plans could see a great deal of their money trickle away over the years. In order to avoid this, consumers are being advised to stagger the purchase of annuity plans from life insurance companies in order to get the maximum yield out of their plans while not losing significant amounts of money in the process.
Vanishing tax breaks could push the life insurance industry to find new ways to make money
The tax breaks that the life insurance industry receives from the federal government are likely to vanish within the coming months as the country’s insurance landscape continues to evolve. This could mean that insurers will be looking to reinforce their financial standing by raising rates, offering more expensive policies, or trying to extract more money from long-term care policies that were inappropriately priced when they were sold several years ago.