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Asset Preservation Advisors




City:Atlanta

State: GA



BIOGRAPHY:
APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Search for Financial Security Leads to Whole Life Insurance

Whole life insurance leads increase in premiums and policy counts as investors search for financial security, according to the latest LIMRA report.

| BY Adriana Reyneri

The search for financial security in an uncertain economic environment has boosted sales in whole life insurance, leading to an increase in both premiums and policy count for total individual life insurance in the first quarter of 2012, according to the latest report from LIMRA, a global consulting firm for the insurance industry.

Total individual life insurance premiums grew 3 percent in the first quarter of the year compared to the same period in 2011, LIMRA reported, while the overall policy count rose 5 percent. Whole life insurance products accounted for half of all the individual life insurance policies issued.

“The biggest driver behind both total premium and policy count growth continues to be whole life,” Ashley Durham, senior analyst for LIMRA product research, said in a statement.  “It remains very attractive to consumers looking for security of premium and cash-value guarantees along with lifetime coverage.”

In the first quarter of 2012, the number of whole life policies grew 6 percent and whole life premiums grew 10 percent, said LIMRA. Whole life products now account for 32 percent of market share, closing the gap with universal life insurance products to 7 percentage points. Universal life insurance still accounts for the largest share, 39 percent, but at its peak in 2007 led whole life by 20 percentage points.

 

The key features of whole life insurance include a guaranteed death benefit, guaranteed premiums, a guaranteed cash value that accumulates tax-deferred and provisions that allow the policy holder to borrow against or partially surrender the policy’s cash value, according to Mass Mutual, a Fortune 500 life and health insurance company.

Whole life insurance may be suitable for investors seeking  fixed premiums that will not increase, a guaranteed death benefit, cash value guaranteed to grow each year and dividends that can be used to increase the value of the policy, according to MetLife, a leading global insurance company. But investors should be aware that whole life premiums are initially more costly than term life policies, the dividends are not guaranteed, and loans and withdrawals can reduce the value of the death benefit.

Term life insurance offers temporary, cost-effective coverage, according to MetLife, and may be a suitable product for investors seeking an affordable way to get maximum coverage, to cover specific financial responsibilities such as college expenses, or to supplement whole life insurance during periods of high-coverage needs, such as the mortgage-paying years. Term life does not accumulate value, and can be very expensive to continue once the term expires.

According to the latest LIMRA report, new term life insurance premiums grew by 1 percent in the first quarter of 2012, and term policy count grew 4 percent in the first quarter. Total annuity sales declined 8 percent to $54.8 billion in the first quarter of 2012, compared to the first quarter of 2011, according to a LIMRA report released in April.  Variable annuity sales fell 7 percent and total fixed annuity sales fell 10 percent, while indexed annuities jumped 14 percent.