Investment income is a huge profit driver for life insurance companies. We’ve spent a lot of time analyzing and reporting on overall investment yield trends for life insurance companies, but that analysis only compares the raw yield insurers achieve on their managed asset pool. It’s possible that a declining yield simple indicates a de-risking strategy. …
Operating cash flow is the cash generated by an insurance company prior to the inclusion of investment income generated by managed assets. Under insurance statutory accounting rules, this is profits generated after deducting operating expenses. Insurers that have issued participating policies can cover planned dividend payments with operating cash and/or investment income. We look at …
Whole life insurance dividend changes often happen once per year and we generally get excited near the end of the year when most companies announce these changes. We’ve been tracking and announcing changes when they become available for the past several years and will continue to do so in the future. The anticipation for the …
Whole life insurance investment yield on assets is an indicator we use to judge how well the insurer will be able to maintain returns on its cash value products. It’s not a perfect metric, but when we look at it in terms of the general trend, we can make assumptions about how the trend of …
10 pay whole life insurance is a straight forward product. An insured/policy holder makes 10 payments to the contract and after that the policy is guaranteed paid up forever and always. Not surprisingly a given level of death benefit for a 10 pay whole life product will have a considerably higher required premium than a …
Indexed universal life insurance is another strong contender to whole life insurance for the purpose of accumulating wealth and generating retirement income through life insurance. If you need a primer on how indexing works, you can find that here. To explain the concept in 25 words or less, we’ll simply say that it’s a product …
When it comes to evaluating whole life insurance dividends and whole life insurance yields it’s important to keep an eye on the investment results of a company’s general account. The general account is the collection of assets the company holds under management to support most of its fixed insurance products. Since investment return is one …
Picking up from where we left off last time on whole life dividends, direct recognition is the opposite strategy to non-direct recognition. It’s the newer approach to handling the payment of dividends when a policy loan is outstanding, and it’s frequently championed as the feature that allows life insurers to pay higher dividends on non-collaterally …
The debate between direct recognition and non-direct recognition is a long-standing one. Be sure to review both of our earlier posts on these topics for more in-depth explanations. So, which is the superior method of treating dividends when there’s an outstanding policy loan? Are the “purests” correct when they point to non-direct recognition as the …
