Life insurance is a big industry with financial assets of more than $4,000 billion in 2004. The major revenue model is life insurance, although it is slowly being overtaken by annuities, i.e. contracts that guarantee a fixed or variable payment over time. Still, the sale of term and whole life policies remain a significant portion of the business. Life insurance companies offer a wide range of products, including term and whole life policies, health, accident and hospital plans. Life-related sales accounted for 24% of the portfolio of insurance companies in 2004. The major customers are individuals and worksite employees. According to the NAIC annual statement database, the premium by way of sales of ordinary and industrial life alone is $108 billion, which is 20% of the premium collection in 2004. It is estimated that there are 1,000 companies selling insurance products in the U.S. They belong to a group of 300 companies. The life insurance industry is characterized by large companies that sell millions of policies each year and small companies that sell thousands of policies. Some of the big names in this industry are MetLife, Prudential Financial and New York Life Insurance. All of these companies are rated by rating agencies like S&P and Moodys. Further, these companies are regulated by each state. Some companies dont have a license to operate in certain states. This limitation should be kept in mind before selecting an insurance company, as in case of complaints, it would be easy to get the assistance of the state. These companies follow a code of ethics and insurance standards, and most are members of Insurance Marketplace Standards Association, a non-profit organization for ethical conduct in insurance marketing. The insurance companies sell their products through agents and banks. Some also have an Internet presence. Before selecting a company, it would be wise to do some homework by considering the size, rating, nature and number of complaints against the company. The right company is the one that meets an individuals needs by tailoring the features and that offers advice through agents. |
