Companies change in undesirable ways. These articles are from this week:- RIM loses a $$$ wrongful dismissal case (Financial Post)
- Nokia remains junk grade with a market value of $6.8 billion euros down from a peak of 300 billion euros (Bloomberg)
- Apple remains environmentally unfriendly with the new MacBook Pro which you can’t recycle, repair or upgrade (Wired) and which adds to ongoing pollution in China (Co.EXIST)
Insurance
Earlier, we learned that- Standard Life stopped selling insurance to individuals and families (Investment Executive, Jan 2012)
- Sun Life is switching its focus from insurance to wealth management (The Globe and Mail, May 2012)
- Manulife’s latest rate hikes take effect today (Advisor.ca, Jun 1, 2012) with other companies following
- Industrial Alliance requires more capital (The Globe and Mail, Jun 13, 2012)
- RBC exits the permanent life and health insurance business (Advisor.ca, Jun 15, 2012)
Why?
We've looked at the challenges in the insurance world before: low investment returns, tough capital requirements.Increasing rates is easy since competitors are now quick to follow. Exiting a market is a much tougher decision.
SACRED
No company has announced major reductions in advisor compensation to dampen the price hikes. That’s tough for one company to implement. Since most advisors are independent, they'd simply start selling products from other companies.Now
What proactive advice has your advisor given you?If you have term life insurance, maybe now's the time to exercise your option to convert to permanent protection without underwriting.
If you have savings in your permanent policy, when's the last time you got an updated projection to show how your policy is performing? You may need to add more money or adjust your investment choices or both.
You may want to add more coverage or more types of coverage while you can. Newer products tend to have higher prices and fewer guarantees. Newer products may have more tough-to-evaluate gimmicks to increase the perceived value.
The Future
Permanent life insurance has attractive tax advantages. The rules haven't changed since 1982. The 2012 federal budget is making changes that reduce the benefits.A detailed discussion of the proposals is … better explained by an actuary. --- FORUM (Jun/Jul 2012)Please don’t ask me.
Permanent insurance helps you plan for the future decades in advance. However, insurers can't predict the future. When changes occur, they take corrective action.
Reality
You can't see the future no matter how much financial planning your advisor does for you. Maybe it's time to make your own hard decisions.In times of turmoil, you see how well your advisor is serving you. This doesn't mean trying to sell you something new and shiny. This means contacting you to ensure you remain well protected.
You buy insurance for peace of mind ... or did.
Links
- Three reasons life insurance prices are shooting up
- Rate hikes: Is your advisor sleeping on the job?
- RBC exits permanent insurance (Advisor.ca, Jun 14, 2012)
- The RBC Canadian Open and unintended consequences
- The top life insurers: is bigger better or best?
- Keeping promises: corporate governance 2011
- Why advisors become advisors
- image courtesy of Kenn Kiser (Ohio)
Podcast 173
direct download | Internet Archive page | iTunes
PS Don’t panic. Take action instead.
Life insurance can be very intimidating to someone that has never bought
ReplyDeleteit before. It can easily lead to information overload because of all of
the resources available. If you think,why do I need it? with sort of negligence, I hope, things do not go worse, before you find the answer.