- 8,707
Primerica?Holy crap! I've never heard of anyone dying from their term insurance. Do you know which carriers have such deadly insurance? I want to make sure I avoid those carriers.
- 1,953
I think I read an article in Best Review. She may have to contact them for a source. Maybe Insurance Information Institute might be a good source also.
The only "official" study I've seen is the Penn State Study from 1993. Being 18 years old, I'm not sure how valid their findings would be today due to changing habits and philosophies. Here are the findings:
In the spring of 1993, Penn State University completed a study regarding the fate of term life insurance policies. The study includes over 20,000 term policies with an aggregate face amount of $4,000,000,000. It includes 1-5 year, 10 year, 20 year, and term to age to age 65 contracts which contained renewal and/or conversion features.
Here are some interesting results of the study:
1. More than 90% of all policies are terminated or converted.
2. 45% of all policies are terminated or converted in the first year.
3. 72% of all policies are terminated or converted within the first 3 years.
4. The average duration before termination or conversion is 2 years.
5. Less than 1 policy in 10 survives the period for which it was written.
6. After 15-20 years exposure, less than 1% of all term life policies are still in force.
7. Only 1% of all term insurance resulted in death claims.
In the spring of 1993, Penn State University completed a study regarding the fate of term life insurance policies. The study includes over 20,000 term policies with an aggregate face amount of $4,000,000,000. It includes 1-5 year, 10 year, 20 year, and term to age to age 65 contracts which contained renewal and/or conversion features.
Here are some interesting results of the study:
1. More than 90% of all policies are terminated or converted.
2. 45% of all policies are terminated or converted in the first year.
3. 72% of all policies are terminated or converted within the first 3 years.
4. The average duration before termination or conversion is 2 years.
5. Less than 1 policy in 10 survives the period for which it was written.
6. After 15-20 years exposure, less than 1% of all term life policies are still in force.
7. Only 1% of all term insurance resulted in death claims.
- 7,790
If you could have just stopped with the bold printed words I could give you a definate answer of 100% of people that go past term die later....
WTF is a definate answer? Do you mean defiant or definite?
- - - - - - - - - - - - - - - - - -
Did that PR gal have a sex change operation during the conversation with you?
Last edited:
- 8,707
Gee Arnguy, I'm guessing you don't live in the city of brotherly love.WTF is a definate answer? Do you mean defiant or definite?
- - - - - - - - - - - - - - - - - -
Did that PR gal have a sex change operation during the conversation with you?
So, if adding the numbers up correctly, 92% lapse, 1% have fatal termitis, that leaves 7% to die after they have been cured from their term policy.
The only thing I question here is the 92%. I'd love to see some insight in how this is broken up. I assume a large percentage is straight lapse, but some of it has to be cancelled and rewritten (agents like thier commissions).
Out of the stuff that runs to end of term, how much of this is 5 years or less?
What exactly is the average life expectancy of a term policy? Inquiring minds want to know! From Larry's study, I assume under 3 years, which seems about right to me as well.
Dan
- - - - - - - - - - - - - - - - - -
Also, I'd be curious, how permanent is a permanent policy? You can ask these questions for term, but I'd be curious to know what percentage of permanent policies pay out as well.
I assume this is a low percentage.
Dan
The only thing I question here is the 92%. I'd love to see some insight in how this is broken up. I assume a large percentage is straight lapse, but some of it has to be cancelled and rewritten (agents like thier commissions).
Out of the stuff that runs to end of term, how much of this is 5 years or less?
What exactly is the average life expectancy of a term policy? Inquiring minds want to know! From Larry's study, I assume under 3 years, which seems about right to me as well.
Dan
- - - - - - - - - - - - - - - - - -
Also, I'd be curious, how permanent is a permanent policy? You can ask these questions for term, but I'd be curious to know what percentage of permanent policies pay out as well.
I assume this is a low percentage.
Dan
Last edited:
It has been a long time since I was around those kind of numbers & data, but death claims for perm were considerably higher than term. For some reason I want to say in the 12 - 15% range.
Still much less than you would think but you gotta remember there are a lot of folks swindled into buying perm that don't need it or understand what they have bought.
Perm life, when sold properly, will ultimately result in a death claim or endowment.
I also saw figures on ROP term a few years ago. Lapse rates were slightly less than straight term and retention (time on the books) slightly longer, but very few stayed around long enough to return a significant portion of the premium.
Of course most of the early ROP term plans paid nothing unless you kept it to maturity or at least 80 - 90% of the way there.
Still much less than you would think but you gotta remember there are a lot of folks swindled into buying perm that don't need it or understand what they have bought.
Perm life, when sold properly, will ultimately result in a death claim or endowment.
I also saw figures on ROP term a few years ago. Lapse rates were slightly less than straight term and retention (time on the books) slightly longer, but very few stayed around long enough to return a significant portion of the premium.
Of course most of the early ROP term plans paid nothing unless you kept it to maturity or at least 80 - 90% of the way there.
- 7,790
I'm in a bad mood today, Peter Tired of this f**king winter weather! A "Code Blue" weather emergency has been declared because the temperatures are not expected to go above 20 degrees for the next two days. I know---we're a bunch of wusses here in the Delaware Valley.
Last edited:
- 11,116
NYL used to have a marketing piece with their own company term statistics; I will look and see if I still have it.
I do remember that only around 3%-4% of their term policies ever pay out (this is just for NYL though), I would guess that the more competitive term companies have a higher payout rate.
I do remember that only around 3%-4% of their term policies ever pay out (this is just for NYL though), I would guess that the more competitive term companies have a higher payout rate.
Similar threads
