The Wall Street Journal reported in December 2011 that “Canada's third-biggest insurer, Sun Life Financial Inc., will stop selling life insurance and retirement-income products directly to U.S. consumers. Sun Life's decision to retrench is a reflection of the tough business environment for many insurers in the U.S., where stock-market volatility and ultralow interest rates have crimped profits and tied up capital.”
Sun Life has discontinued U.S. sales of life insurance at the end of 2011 due to "unfavorable product economics." As reported in a previous Veralytic Newsletter, the cost of doing business in the Guaranteed Universal Life (GUL) markets has risen as the interest rates have fallen. Many U.S. insurers currently are repricing and/or retiring their products as the interest rates drop and remain low.
The Wall Street Journal article goes on to say “interest rates are as low as they have been in decades in the U.S., and investors believe the Federal Reserve will keep its key rate near zero for the foreseeable future in response to tepid economic growth. While low rates aren't expected to bring about the collapse of major U.S. life insurers, they've led some investors to lose interest in the industry. The company plans to keep its life business in Canada.”
Since the announcement in December, the rating agencies have downgraded Sun Life in both January and February 2012. The financial strength and claims paying ability of an insurer is one of the first questions asked when trying to ascertain suitability of life insurance products. However, financial strength and claims-paying ability ratings of the insurer are only one of at least 5 major suitability considerations. Now is the time to measure the pricing and performance in your Sun Life insurance policies on all 5 factors of suitability so that future pricing and performance and ongoing suitability can be monitored.
Veralytic is offering special pricing on Veralytic Reports for any Sun Life holding for a limited time. While others might offer “free” policy reviews but remember to always ask these 3 questions:
- Are product suitability, competitiveness conclusions and/or recommendations based on independent research?
- Is the policy review compliant with industry regulations and generally accepted authority?
- Does the policy review measure costs relative to the universe of peer group alternatives?
Veralytic is simply the fastest, easiest, and most comprehensive and cost-effective way to independently verify to clients and their advisors whether or not the pricing and performance of existing or proposed life insurance is in their best interest. Only Veralytic is accepted for independent client representation, endorsed by the New York Bankers Association (NYBA) and compliant with industry regulations and established case law.
Special Pricing for Sun Life Policies as follows:
Subscribers: Free – make sure you mention this article in your cover page or e-mail.
Non-Subscribers: $125 (75% off the $500 per Report fee paid by non-subscribers). Click here to subscribe or send your COMPLETE inforce illustration (including the detailed expense pages) to firstname.lastname@example.org along with a cover page mentioning this article.
This special offer is available for all Sun Life policy holdings submitted on or before 04/16/2012.