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Life insurance has classically provided financial security to millions of families to offset the financial loss due to the premature death of a breadwinner. Life insurance for this purpose can be as simple as a 10-year term policy providing for a temporary need, or the more complex indexed universal life (IUL) that has become one of the most popular cash value policies purchased in the last 15 years. However, policy sales have begun to shift away from a focus on death benefits toward providing tax-free retirement income. When premium financing is added to the inherent complexity of IUL, such plans have been failing at an alarming rate. The result can end in time-consuming and costly litigation against agents and their insurance companies. [ABSTRACT FROM AUTHOR]

Estate planning is a multifaceted process encompassing the accumulation, management, and preservation of wealth. Among estate planning tools like wills or life insurance policies, two common options for asset distributions are per stirpes and per capita. Per stirpes distribution, which is relatively straightforward and more widely used, directs the inheritance to the lineal descendants of a predeceased beneficiary. In contrast, the per capita method has varying interpretations in estate planning, financial planning, and insurance fields. This method encompasses several options. This article delves into the ambiguities in the per capita option, particularly the lack of a standardized definition. It underscores the necessity for financial professionals to navigate these distinctions effectively, ensuring clients' objectives are met precisely and clearly in a field where precision and clarity are paramount. [ABSTRACT FROM AUTHOR]

Whole life insurance is structured to guarantee policy premiums, cash values, and death benefits from the time of purchase until the time to file a death claim. For more than 200 years, whole life was not only the product of choice to assure lifetime bene- fits, it was essentially the only choice. This tradition was upended with the introduction in 1978 of universal life (UL). UL was the first product to break from up-front guarantees with an orientation depending on largely nonguaranteed elements. "Premiums" haven't been the same since. [ABSTRACT FROM AUTHOR]

In this third and final article, foundational elements of a premium-financed indexed universal life insurance sales strategy will be explored through a series of forecast outcomes. Foundational elements include indexed interest crediting rates, loan interest charges, and the amount and timing of borrowed funds. Determining appropriate indexed interest rates to illustrate using life insurance company software will be informed by historical cap and participation rates. Determining appropriate loan interest rates to forecast will be informed by historical 12-month LIBOR rates. Given that the dominant theme of these articles is to explore what it means for a financial service professional to act ethically and responsibly within the context of premium-financed indexed universal life insurance sales strategies where the insurance policy is viewed as the sole source of loan repayment, it is hoped that the financial service professional will gain a better understanding of how to talk about and present such strategies so that their clients have a more complete perspective when deciding whether to adopt this type of strategy and, if so, in what manner they should proceed. [ABSTRACT FROM AUTHOR]

Life insurance policies can be straightforward (10-year term) or more complicated (indexed universal life with a proprietary index and a 50-page illustration), and there are many policy styles in between. When considering what type of product is suitable and in the client's best interest, one of the most difficult aspects of the buying process is appreciating that the illustration is not the policy. Policy illustrations are a presentation of nonguaranteed premiums, policy credits, policy debits, and death benefits reflecting a single scenario in which crediting rates don't vary, policy expenses don't deviate from the original nonguaranteed schedule, and customers always pay the planned premium into the policy (and may or may not borrow)--as the illustration assumes. This is not how life insurance works in the real world. [ABSTRACT FROM AUTHOR]

In Estate of Blount, the 11th Circuit Court of Appeals held that life insurance proceeds used to redeem a shareholder's shares are not counted in the fair market value of the company when valuing those shares. Given the very different conclusions reached by the 11th Circuit in the Blount case and the 8th Circuit in the case of Connelly v. United States, if it is not feasible for shareholders to have a cross-purchase agreement, having an insurance-funded stock-redemption agreement may present a valuation challenge. The larger exemptions now applicable under the estate tax law may insulate many owners of closely held businesses from valuation concerns. However, those owners of corporations who are concerned about estate tax planning should seek the advice of qualified appraisers and attorneys to structure a buy-sell agreement and a business appraisal that takes into account insurance funding if a stock-redemption format is the owners' preference. [ABSTRACT FROM AUTHOR]

Mutual aid insurance is a collective type of insurance where the policyholders share the potential losses or risks that they may face. In this paper, we establish a mathematical structure for mutual aid insurance through a three-state (good, bad and death) process, which is driven by an inhomogeneous Markov chain. The objective of maximizing an individual's lifetime utility is achieved by addressing a stochastic control problem that involves both mutual aid insurance and life insurance. We obtain the explicit expressions for optimal consumption, investment strategies, and life insurance premiums by employing the corresponding Hamilton-Jacobi-Bellman equation. In the end, we carry out a numerical analysis to show the significance of mutual aid insurance and demonstrate the optimal mutual aid insurance premium. [ABSTRACT FROM AUTHOR]

We revisit surplus on general life insurance contracts, represented by Markov models. We classify technical bases in terms of boundary conditions in Thiele's equation(s), allowing more general regulations than Scandinavian-style 'first-order/second-order' regimes, and replacing the traditional retrospective policy value. We propose a 'canonical' model with three technical bases (premium, valuation, accumulation) and show how each pair of bases defines premium loadings and surplus. Along with a 'true' or 'real-world' experience basis, this expands fundamental results of Ramlau-Hansen [(1988b). The emergence of profit in life insurance. Insurance: Mathematics and Economics, 7(4), 225–236]. We conclude with two applications: lapse-supported business; and the retrospectively-oriented regime proposed by Møller and Steffensen [(2007). Market-valuation methods in life and pension insurance. Cambridge University Press]. [ABSTRACT FROM AUTHOR]

Life insurance companies, as equity stakeholders in policyholders' lives, have incentives to mitigate their health risks. I introduce a framework that enables life insurers to evaluate the financial viability of developing and implementing health engagement programs. By leveraging a proprietary big database of health and mortality information from a large U.S. life insurer, I use machine learning techniques to quantify the benefits and use a rational addiction model to calculate the costs associated with these programs. The estimated net benefit available to the life insurer from the smoking cessation program is USD 87 million and the aggregate benefit from including other chronic conditions is USD 872 million. I explore the broader application of this framework in a general health policy context. [ABSTRACT FROM AUTHOR]

Childhood unexpected trauma casts a lifelong shadow on subsequent financial behaviours. The existing literature has mainly investigated stock or bond market participation, and few scholars focus on insurance decisions. Our paper enriches previous studies by testing the impact of childhood famine exposure on household life insurance demand in middle and older age groups. Using CHARLS, we discover that householders exposed to the 1959–1961 Great Chinese Famine as children were more inclined to own life insurance policies and pay higher premiums. Specifically, respondents who experienced the famine between 0–2 or 7–17 years old highly promoted their life insurance demand, whereas no statistically significant effects were observed for preschool famine experience. Additionally, women and people with three or more children were more likely to be influenced by the famine. Finally, risk and time preference were effective mediation factors, both channelling around 5% of the relationship. [ABSTRACT FROM AUTHOR]

Purpose: This study examines the relationship between policyholders' psychographic characteristics and demand decisions for life insurance products in Uganda. Design/methodology/approach: The study is based on a cross-sectional survey. Using a purposive sampling method, 389 questionnaires were administered to life insurance policyholders in the four geographical regions of Uganda. Partial least squares structural equation modeling (PLS-SEM) was employed to analyze the primary data, specifically to test the relationships between the dependent and independent variables. Findings: The findings indicate a positive and significant influence of psychographic characteristics on demand decisions for life insurance products. In addition, the analysis indicates that the two first-order constructs of psychographic characteristics, namely price consciousness and consumer innovativeness, are positive and significant predictors of demand decisions for life insurance products. In contrast, the third first-order construct religious salience, exhibits a negative and nonsignificant effect on demand decisions for life insurance products. Practical implications: For insurance practitioners, to influence demand decisions, they should emphasize premium-related appeals in their marketing messages (price consciousness) ignore product decisions based on religious beliefs and norms (religious salience). They should also ensure that insurance products are highly trustable and experiential (consumer innovativeness). For insurance policymakers, it offers an in-depth understanding of customer psychographic characteristics, which can be used to identify exploitative information embedded in certain marketing campaigns targeting specific psychographic characteristics, for better regulation. Originality/value: The study provides a basis for understanding lifestyle and personality characteristics (psychographics), which may influence demand decisions for life insurance products in a developing country like Uganda, where the insurance industry is at an early stage of development. Peer review: The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-06-2023-0440 [ABSTRACT FROM AUTHOR]

Recent literature has found conditional transition rates to be a useful tool for avoiding Markov assumptions in multi-state models. While the estimation of univariate conditional transition rates has been extensively studied, the intertemporal dependencies captured in the bivariate conditional transition rates still require a consistent estimator. We provide an estimator that is suitable for censored data and emphasiz e the connection to the rich theory of the estimation of bivariate survival functions. Bivariate conditional transition rates are necessary for various applications in the survival context but especially in the calculation of moments in life insurance mathematics. [ABSTRACT FROM AUTHOR]

Modern welfare states compete with private providers of welfare in offering economic security. This is most evident in the case of pensions competing with life insurance and private pensions as well as of public health insurance competing with private insurance providers. The common view of this public–private relationship is one of a trade-off: longitudinally, political scientists describe how retrenchment was pushed by privatized welfare, whereas economists trace the crowding-out of private to public welfare provisions. Cross-sectionally, they claim that countries have lower public spending levels because they have a large private sector. We suggest a more nuanced view. Drawing on a new long-run panel data of public pension and private life insurance expenditures and contributions in 20 OECD countries since Bismarck to the current day, we show that in the postwar years a cross-sectional trade-off emerged, which then faded. Longitudinally, complementary relationships of public and private provision growth have become the norm. We argue theoretically and show empirically that trade-offs only occur if governments still hold (waning) anti-interventionist and pro-market views. [ABSTRACT FROM AUTHOR]

Background Carers play an important role in supporting patients diagnosed with high-grade glioma (HGG). However, this experience is frequently distressing and many carers require support. Objectives To describe unmet needs of highly distressed carers of people with HGG and recommendations and referrals made by a nurse to support them within the Care-IS trial. Methods Descriptive case series. Carers of people with HGG in the Care-IS trial reporting severe anxiety and/or depression at baseline and/or 4 months and high distress at baseline (during chemoradiotherapy) and at 4 months were included. Carers completed the Partner and Caregiver Supportive Care Needs Scale and Brain Tumor Specific Unmet Needs Survey for carers at baseline, 2, 4, 6, and 12 months. Monthly nurse telephone assessments documented carers' needs, recommendations, and referrals made. Data are reported descriptively. Results Four highly distressed carers were identified (N  = 98). Each reported a moderate-high need at ≥1 timepoint for: financial support and/or travel insurance; making life decisions in uncertainty; information about cancer prognosis/likely outcome; and coping with unexpected treatment outcomes. Specific brain tumor unmet needs were: adjusting to changes in personality, mental and thinking abilities, and accessing government assistance. Nurses provided information about treatment, side effects, and practical support. Recommendations for clinical care and referrals to community-based services, and medical specialists were offered. Conclusions Highly distressed carers have diverse support needs in many domains, which can change over time. Nurses were critical in identifying carers' needs, providing support, and making referrals. Carers' distress and needs require ongoing screening and management. [ABSTRACT FROM AUTHOR]

Markov chains play a key role in a vast number of areas, including life insurance mathematics. Standard actuarial quantities as the premium value can be interpreted as compressed, lossy information about the underlying Markov process. We introduce a method to reconstruct the underlying Markov chain given collective information of a portfolio of contracts. Our neural architecture characterizes the process in a highly explainable way by explicitly providing one-step transition probabilities. Further, we provide an intrinsic, economic model validation to inspect the quality of the information decompression. Lastly, our methodology is successfully tested for a realistic data set of German term life insurance contracts. [ABSTRACT FROM AUTHOR]

Life insurance enhances households' capacity to absorb financial shocks and protects against personal risks that no one likes to contemplate. This is even more important in times of economic hardship such as now, when many Europe countries and particularly Spain are going through difficult times due to rising inflation, the war in Ukraine, and the ongoing COVID‐19 pandemic. Although previous studies have analysed the driving forces of life insurance demand, the influence of the individual's financial planning horizon, financial knowledge, and financial self‐control have been underexplored. This study analyses the influence of personal financial attributes on life insurance demand and, in so doing, explores whether the effects of such attitudes differ across different generational cohorts (i.e., the silent generation, baby boomers, Gen Xers, and millennials). The data, taken from the Survey of Financial Competences, comprises 7245 Spanish individuals. Evidence from multivariate analyses reflects the relevance of standard sociodemographic characteristics in explaining individuals' decisions to become life insurance holders. In contrast, evidence does not support a statistically significant relationship in the case of behavioural variables such as financial self‐control and the financial planning horizon. [ABSTRACT FROM AUTHOR]

The Dutch healthcare insurance reform in 2006 replaced the dual system of public and private insurance with a single compulsory health insurance scheme, in which insurance providers compete for customers in a free market. This paper investigates whether competition among healthcare insurers has indeed increased and their efficiency has improved. We measure competition directly from either shifts in market shares, or developments in profits, using Dutch regulatory data. We find that a structural break occurs after the reform: competition is significantly higher after 2006 than before. This holds both for the analysis based on shifts in market shares and that based on profits. Several robustness tests confirm this outcome. Hence, the reform has had a significant impact. Nevertheless, we find that the health insurance sector is still less competitive than financial sectors such as banking and life insurance. [ABSTRACT FROM AUTHOR]

The aim of this paper is to investigate the relevance of sustainable product attributes as compared to ongoing costs and risk–return profiles when individuals choose funds underlying unit-linked life insurances. Regarding sustainability attributes, we focus on the product classification according to the Sustainable Finance Disclosure Regulation as a European regulatory transparency standard, and on sustainable investment strategies. We conduct two choice-based conjoint analyses using a German panel for unit-linked life insurances as well as fund savings plans as a financial product comparison. We estimate the relative importance, part-worth utilities, and the marginal willingness to pay for changes in product attributes. Our results suggest that private investors of unit-linked life insurances value sustainable product attributes and that they result in a slightly higher marginal willingness to pay, but risk–return indicators and especially ongoing costs are currently more relevant. We find further indications that sustainability attributes are less relevant in the setting of a unit-linked life insurance as compared to a fund savings plans setting. [ABSTRACT FROM AUTHOR]

BACKGROUND AND OBJECTIVES: Nowadays, in order to continue their activities and attract and retain customers, insurance companies should think more about customer confusion and provide effective strategies to eliminate or reduce customer confusion. For this purpose, this research aims to provide effective strategies in managing customer confusion in life insurance. METHODS: This research is based on thematic analysis (coding and recognition of the underlying categories of the interview text or writing). In terms of the objective, it is considered fundamental based on the data collection method. The research participants are experts in insurance and marketing industry. Non-probability, judgmental, and snowball sampling methods were utilized and the number of sample size according to the theoretical saturation of the data was 23 people. Semi-structured interviews were conducted to collect data. FINDINGS: According to the results of the research, 3 central cores and 18 main themes with the title of customer orientation (continuous follow-up of customers, communication with customers, understanding customer needs and improving customer service and well-being), marketing strategies (holding significant and attractive events, word-of-mouth advertising, identity building), desirable in social networks, innovative use of brochures, TV programs, effective advertisements) providing a complete package of high quality services (monitoring the performance of employees, transparency of performance, flexibility in insurance coverage, providing loyalty programs in a new way, focusing on the value chain, visualizing insurance life, use of information technology (intelligence)) were identified. CONCLUSION: In this research, the strategies of overcoming customer confusion management in life insurance services were considered. According to the findings of the research, using systems to track and understand the needs of customers by creating and maintaining long-term relationship have made customer orientation an important factor. Also, the creation of marketing strategies based on the production of stimulating content and the use of the capacity of virtual space along with the development of programs to provide high-quality services to provide superior value to the customer and according to the current conditions may assist managers and entities in charge to overcome customer confusion. In order for the desired strategy to be successful, it is necessary for managers and entities in charge to consider the confusion of customers in all stages and processes of implementing strategies. [ABSTRACT FROM AUTHOR]

BACKGROUND AND OBJECTIVES: In order to create a secondary life insurance market in which life insurance policy holders can easily sell their insurance policies, it is necessary to identify and investigate the legal bases and effects of life insurance policy assignments so as to set up the relevant rules governing this market. In this regard, this research seeks to examine the legal challenges of transferring life insurance policies from one person to another. METHODS: Legal analysis is done using legal texts, including jurisprudence, legal books, and domestic and foreign published articles. Based on this, the working method in this article will be library, analytical, and descriptive one. In this way, the juridical and legal foundations of life insurance transfer are examined first, and then the nature of the transfer contract is studied, and finally, the effects and rulings resulting from this transfer are analyzed accordingly. FINDINGS: Regarding the rules governing life insurance in Iran’s legal system, unlike many legal systems in the world, not many laws have been approved and this part has been neglected by the legislator. This is the basis for the emergence of disagreements regarding the rulings related to this insurance. Most of the provisions related to the life insurance policy in Iran should be extracted from the general conditions of the life insurance policy and the law is silent about most of the cases. CONCLUSION: This article shows that it is possible to transfer a life insurance policy and extract rulings governing this transfer based on the current laws and regulations in Iran’s legal system using general regulations to a large extent. Based on the principle of freedom of contract transfer, it is allowed to transfer any contract that is not based on an individual. The effects of this transition are discussed in detail in the article. [ABSTRACT FROM AUTHOR]

This paper studies life reinsurance as a solution to default risk in equity-linked life insurance products with surplus participation. The problem is considered under both perfect and asymmetric information about the insurer's risk profile between the reinsurer and the insurer. In both cases, we analyze the existence of proportional reinsurance and the impact of the insurer's investment strategies on optimal reinsurance. We find that the more risky the insurer's investment portfolio is, the more risk the insurer tends to transfer to the reinsurer. Further, information asymmetry leads to additional information costs and consequently to a larger reinsurance premium and a lower reinsurance share. [ABSTRACT FROM AUTHOR]

Some sales managers embrace unethical techniques to improve their sales divisions' efficiency. In this study, our research question is: "How does ethical leadership increase the sales divisions' effectiveness? This study examines the influence of ethical leadership on sales divisions' effectiveness. The mediating effects of felt accountability and organizational commitment in the relationships are further tested. The full-time salespeople working for the life insurance companies were recruited to join the investigation. A total of 450 questionnaires were disseminated among the participants, subsequently yielding 382 completed and valid responses. Findings reveal a significant positive correlation between ethical leadership and both felt accountability and organizational commitment. Moreover, felt accountability emerges as a crucial factor mediating the relationship between ethical leadership and organizational commitment. The study underscores the importance of further exploring the mediating effects of felt accountability and organizational commitment on ethical leadership and organizational effectiveness. The implications of this research extend to both academia and industry. For researchers, it offers insights into the unique challenges within the life insurance industry, shedding light on the necessity of ethical leadership in sales management. Moreover, it adds complexity to the study of ethical leadership by examining its influence on factors like felt accountability and organizational commitment. For insurance practitioners, the findings provide actionable insights to enhance decision-making and organizational performance. [ABSTRACT FROM AUTHOR]

Motivation: The need to implement the process of economic transformation in the recent past is what significantly differentiates the countries of Central and Eastern Europe from other members of the European Union. Integration into the financial system of the European Union has been an important factor influencing the process of transformation of the life insurance sector and the establishment of the level of competition, as well as the quality and scope of insurance services offered. In addition, the improvement in the macroeconomic situation and the increase in household income have had a significant impact on the growth in demand for insurance products from the life insurance segment. Despite positive changes, the insurance market of Central and Eastern European countries remains a relatively underdeveloped market, and its structure, unlike that of Western European countries, is dominated by property insurance. This points towards a need for further research into the determinants of life insurance market growth in this region of Europe. Aim: The aim of this paper is twofold. The first part presents an assessment of the level of development of the life insurance market in ten countries of Central and Eastern Europe over the period 2011-2021 using the method of multivariate comparative analysis in dynamic terms. The second part of the paper is devoted to an attempt to identify the determinants of the development of this market using econometric models for panel data (GMM estimator). Special attention is paid to the impact of economic growth on the life insurance market. Results: The life insurance market varies widely among the group of countries considered. The trends of change during the period under consideration were also different. The most severe downturn in the life insurance market was recorded in Poland and the Czech Republic. Significant development was observed in Lithuania and Latvia, countries with an underdeveloped market in the past. The econometric models used confirmed the impact of economic development on the life insurance market. [ABSTRACT FROM AUTHOR]

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Developing an informed lapse management strategy (LMS) is critical for life insurers to improve profitability and gain insight into the risk of their global portfolio. Prior research in actuarial science has shown that targeting policyholders by maximising their individual customer lifetime value is more advantageous than targeting all those likely to lapse. However, most existing lapse analyses do not leverage the variability of features and targets over time. We propose a longitudinal LMS framework, utilising tree-based models for longitudinal data, such as left-truncated and right-censored (LTRC) trees and forests, as well as mixed-effect tree-based models. Our methodology provides time-informed insights, leading to increased precision in targeting. Our findings indicate that the use of longitudinally structured data significantly enhances the precision of models in predicting lapse behaviour, estimating customer lifetime value, and evaluating individual retention gains. The implementation of mixed-effect random forests enables the production of time-varying predictions that are highly relevant for decision-making. This paper contributes to the field of lapse analysis for life insurers by demonstrating the importance of exploiting the complete past trajectory of policyholders, which is often available in insurers' information systems but has yet to be fully utilised. [ABSTRACT FROM AUTHOR]

Academia and governments have shown interest in studying the influence of the global economic policy uncertainty index (GEPU) and the geopolitical risk index (GPR) on insurance development. Several empirical studies have been conducted to examine the influence of GEPU and GPR on insurance development. Nevertheless, the empirical results failed to achieve consensus. This study aims to study the asymmetric impacts of the GEPU and the GPR on insurance sector development in ASEAN from 1990 to 2020. We used the linear panel autoregressive distributed lag (PARDL) approach and the asymmetric panel autoregressive distributed lag (PNARDL) approach. The results from the linear panel ARDL showed that GEPU and GPR had an impact on non-life insurance (NI), but both variables did not have an impact on life insurance (LI). Furthermore, the asymmetric panel ARDL showed no significant impact of positive shocks from GEPU had a positive impact on LI and NI, but the negative shocks from GEPU only had a positive impact on NI. Positive and negative shocks from GEPU lead to an increase in the NI. Interestingly, we found that the positive shocks of GPR led to an increase in NI, but positive or negative shocks of GPR did not have an impact on LI. Policymakers in ASEAN should closely look at the GEPU and the GPR for insurance policy development. JEL Codes: E6, G0 [ABSTRACT FROM AUTHOR]

The insurance penetration rate in Indonesia remains low and has even been declining, despite the significant role the insurance industry plays in supporting national development. Meanwhile, Generation Z is beginning to dominate Indonesia's demographic structure, particularly as the demographic bonus period approaches. Low financial literacy is often cited as a cause of the low attitude and purchase intention towards life insurance. Additionally, low perceived benefit of insurance is also known to influence Generation Z's attitude. Generation Z is also associated with behaviors that differ from previous generations. This study aims to identify the factors influencing Generation Z's attitude and purchase intention towards life insurance, focusing on financial literacy, perceived benefit, and demographics. The research method is quantitative, with samples taken from Generation Z residents in Jabodetabek who have income but do not yet have life insurance. The research instrument used is a questionnaire, with a total of 297 valid questionnaires collected and analyzed using variance-based structural equation modeling (SEM). The results show that financial literacy, perceived benefit, and demographics have a significant and positive influence on Generation Z's attitude and purchase intention. Among these factors, perceived benefit emerges as the strongest predictor of attitudes towards life insurance. The financial literacy level of Generation Z in Jabodetabek is found to be adequate. This indicates that financial literacy does not directly translate into insurance literacy, suggesting that financial literacy is not the main cause of the low attitude and purchase intention towards life insurance among Generation Z in Indonesia. [ABSTRACT FROM AUTHOR]

We investigate the optimal decisions on investment, consumption and purchasing life insurance of a household with two consecutive generations, say parents and children. Parents can invest in risk-free and risky assets, with the risky asset's price driven by the Heston local-stochastic volatility model, better reflecting market conditions. Life insurance can be purchased to hedge against wealth loss from parents' unexpected death before retirement, especially if children have no income. Meanwhile, utility functions of the parents and children are individually considered in relation to the uncertain lifetime. The objective of the household is to appropriately maximize the weighted average of the respective utilities of parents and children. In order to derive the optimal strategies, we adopt a dual method, Legendre transformation, and an asymptotic expansion technique to solve the associated Hamilton–Jacobi–Bellman equation achieved by a dynamic programming approach. Finally, an asymptotic solution is obtained and numerical examples are provided to illustrate the impacts of some important parameters on the optimal strategies. [ABSTRACT FROM AUTHOR]

Abstract Life insurance companies, as equity stakeholders in policyholders’ lives, have incentives to mitigate their health risks. I introduce a framework that enables life insurers to evaluate the financial viability of developing and implementing health engagement programs. By leveraging a proprietary big database of health and mortality information from a large U.S. life insurer, I use machine learning techniques to quantify the benefits and use a rational addiction model to calculate the costs associated with these programs. The estimated net benefit available to the life insurer from the smoking cessation program is USD 87 million and the aggregate benefit from including other chronic conditions is USD 872 million. I explore the broader application of this framework in a general health policy context.

The aim of this research is to determine the influence of perceived benefits and perceived risks on intention to purchase life insurance products with consumer perceived fear as a mediating variable. The sampling method uses non-probability sampling with a purposive sampling technique, namely respondents are selected based on certain criteria. Hypothesis testing in this research uses SEM (Structured Equation Modeling) analysis and the program used for analysis is AMOS (Analysis of Moment Structure). The results of this study indicate that Perceived Risk significantly influences Intention to Purchase Life Insurance Products while Perceived Benefit does not have a significant effect. Perceived Risk also significantly influences Life Insurance Consumer Perceived Fear while Perceived Benefit does not have a significant influence. Lastly, Consumer Perceived Fear acts as a mediating influence on Risk Perception on Intention to Purchase Life Insurance Products.

The article presents the results of a synthesis of interpretive research undertaken to examine the benefits for consumers and to assess the development potential of the insurance market thanks to the functioning of the secondary life insurance market. The solutions adopted worldwide regarding introducing insurance companies› obligation to inform about the existence of the secondary life insurance market were analyzed as a potential model to be used in Poland. A study of the literature and legal regulations regarding the functioning of the life insurance market was carried out as an analysis of legal acts in force in the world and in Poland, as well as an examination of the regulations and mechanisms for selling life insurance policies on the secondary market around the world. It has been shown that life insurance policyholders are not aware of the existence or possibility of a secondary market. The lack of an active secondary market means fewer benefits for consumers from the functioning of the insurance market, and the competitive potential of the entire insurance market becomes limited.

The financial service professional who wants to abide by a code of ethics and comply with other regulatory responsibilities can find a confusing array of product features and illustration assumptions when presenting indexed universal life insurance in the context of premiums financed by an outside lender. The inability of the illustration software to estimate the likelihood of the forecast numbers as presented, the insurance company’s right to change nonguaranteed elements, and interest rate and other risks associated with loans in general make for a daunting challenge for one so motivated. This article seeks to identify principal product features, capture the limitations associated with indexed universal life illustrations, and introduce the possibility of a better approach. [ABSTRACT FROM AUTHOR]

Following New York’s highest court’s reinstatement of New York Insurance Regulation 187 in October 2022, consumer advocates have been hopeful that customer-focused standards supporting client best interest and only suitable products would next be adopted in California. As it happened, the California Department of Insurance had concerns over NAIC’s Model Annuity Suitability Regulation not going far enough to place the buyer’s interests above those of the seller (the agent or the carrier) and was inspired to press for New York-style regulations covering not just the sale of annuities but also life insurance. While 36 states have (as of April 2023) adopted the NAIC regulation, California has yet to do so, but is obligated to adopt at least minimum standards by 2025 or be in peril of federal intervention. The timing seemed appropriate for enhanced protection for consumers buying cash value life insurance and annuities. But during California’s harsh winter and early spring, strong headwinds pushed hard on more than its fragile climate. [ABSTRACT FROM AUTHOR]

Variable annuities, the largest liability of U.S. life insurers, are investment products containing long-dated minimum return guarantees. I show that guarantees with similar economic risks are treated differently by regulation and these differences impact insurers' hedging behavior. When the regulatory regime recognizes certain risks, insurers start to hedge these risks in a substantial way. For some guarantees, this involves hedging both interest rate and equity market risks. However, for others, it involves hedging only equity market risk. As the regulatory regime still does not recognize the interest rate risk of all guarantees, insurers remain exposed to substantial interest rate risk. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Young individuals rarely seek information about life insurance—a product that offers long-term benefits that might not motivate a desire to act now. Framing life insurance messaging as a gain in the present (e.g., "ensure your loved ones are protected today") is thought to motivate younger individuals to seek information about insurance policies. A field experiment with a large life insurance issuer and a pre-registered experiment reveal that loss aversion and temporal orientation frames influences whether individuals aged 25–49 years shop for life insurance. Specifically, the results suggest that the superiority of gain frames over loss frames requires positioning the benefits well in the future, despite the need to act now. This study thus also contextualizes the realities and practical difficulty of framing financial products in ways that might interest a potentially vulnerable population. [ABSTRACT FROM AUTHOR]

Equity-indexed annuities (EIAs) with investment guarantees are pension products sensitive to changes in the interest rate environment. A flexible and common choice for modelling this risk factor is a Hull–White model in its G2++ variant. We investigate the valuation of EIAs in this model setting and extend the literature by introducing a more efficient framework for Monte-Carlo simulation. In addition, we build on previous work by adapting an approach based on scenario matrices to a two-factor G2++ model. This method does not rely on simulations or on Fourier transformations. In numerical studies, we demonstrate its fast convergence and the limitations of techniques relying on the independence of annual returns and the central limit theorem. [ABSTRACT FROM AUTHOR]

In this article, as in the two that will follow in this series, there is an attempt to define the limits of how life insurance may be presented by the financial service professional and others who are governed by a code of ethics or state and/or federal laws and regulations. This is in the context of one of the most compelling sales opportunities experienced by the life insurance industry--the sale of premium-financed indexed universal life insurance to high-net-worth clients and other clients of means who are interested in taking advantage of positive arbitrage within a leveraged sale. [ABSTRACT FROM AUTHOR]

Financial planners should understand the role that Social Security survivor benefits play in the financial planning process. It is important to know that they do not provide all the life insurance that is needed. That said, survivor benefits are provided to millions of widows and children. The rules for how long the benefit checks will last need study and should be explained to the client. In addition, it should be noted that survivor benefits can be subject to the retirement earnings test. [ABSTRACT FROM AUTHOR]

Developing an informed lapse management strategy (LMS) is critical for life insurers to improve profitability and gain insight into the risk of their global portfolio. Prior research in actuarial science has shown that targeting policyholders by maximising their individual customer lifetime value is more advantageous than targeting all those likely to lapse. However, most existing lapse analyses do not leverage the variability of features and targets over time. We propose a longitudinal LMS framework, utilising tree-based models for longitudinal data, such as left-truncated and right-censored (LTRC) trees and forests, as well as mixed-effect tree-based models. Our methodology provides time-informed insights, leading to increased precision in targeting. Our findings indicate that the use of longitudinally structured data significantly enhances the precision of models in predicting lapse behaviour, estimating customer lifetime value, and evaluating individual retention gains. The implementation of mixed-effect random forests enables the production of time-varying predictions that are highly relevant for decision-making. This paper contributes to the field of lapse analysis for life insurers by demonstrating the importance of exploiting the complete past trajectory of policyholders, which is often available in insurers’ information systems but has yet to be fully utilised.