Cancer loves sugar, so it’s only appropriate that a 7-Eleven--a key purveyor of sugary substances such as the famous Big Gulp--would be selling life insurance, in this case, in Japan. LIfe insurance, after all, should be as convenient to obtain as it is to need.
At 7-Eleven Japan’s over 20,000 outlets nationwide, customers will be able to buy insurance through an installed multifunction copy machine.
The company has partnered with MS&AD's affiliate Mitsui Sumitomo Aioi Life Insurance and will start selling cancer insurance later this month. 7-Eleven says that it hopes to achieve around 60,000 new life insurance sales through this new initiative. It currently sells around about 300,000 new personal insurance contracts per year.
In the US, amid the coronavirus pandemic, life insurers are also trying to avoid face-to-face sales. Or, in some cases, they are trying to avoid sales altogether.
The spread of the coronavirus has acted as a catalyst for life insurance demand, prompting people who have put off getting coverage to finally sign up.
Life insurance comparison site Quotacy saw a 25% increase in people applying for policies in March and April, versus January and February.
However, it seems that actual sales of life insurance policies in the United States are dropping, despite the demand. Insurers are reportedly turning away business from some Americans who want a life insurance policy in an unprecedented situation.
The rapid decline in interest rates, which the insurers believe won’t rebound significantly anytime soon, has caused the suspension of sales of certain long-duration products. As interest rates drop, some insurers are getting pickier and are hitting the pause button on some applications.
Thomas Rosendale from A.M. Best who follows the life and health insurance industries told Forbes that the insurers stop completely.
“Depending upon the extent of progression of the disease in the U.S., it is possible that companies could even temporarily suspend their acceptance of life insurance applications.”
For now, all major insurers have limited the size of so-called guaranteed universal-life policies, which promises that the annual premium bill won't ever increase during the owner's lifetime. Such policies are also highly sensitive to low-interest rates.
According to Wink’s Sales & Market Report, the first-quarter non-variable universal life sales are down 2.5% over the first quarter of last year.
“Non-variable universal life (UL) sales include both indexed UL and fixed UL product sales. Sales of these products were down 28.4% over the fourth quarter of 2019, when many insurers rushed product sales under old mortality and PBR regulations,” the report said.
In one example, Prudential Financial has suspended taking applications for 30-year term life insurance policies in response to “unprecedented market volatility.” Shorter-term lengths are still available.
Likewise, Penn Mutual Life Insurance has temporarily halted policy sales to people 70 and older and to those who are in poor health.
A few other insurers are also temporarily suspending life policy applications for that age group. Some are even suspending applications for people in their 60s who previously may have been eligible for coverage despite common health problems such as diabetes or asthma.
Whatever the ultimate outcome, the life insurance industry has been wrongfooted and is scrambling to figure something out, while anyone over 70--and sometimes over 60--will have to come up with an alternative plan for taking care of their loved ones in the event of death.
By Charles Benavidez for Safehaven.com
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