A special report featured in the April 2024 edition of the Insurance Journal delved into simplified issue life insurance, highlighting distinctive features of these products and the ways they can facilitate broader coverage to more individuals.
Kim Girard, Senior Director of Individual Insurance, Savings, and Retirement Products at iA Financial Group, shares this view. In this follow-up article, she reveals that in 2023, iA Financial Group sold 15,200 simplified issue policies in Canada, for a 16.3 per cent increase compared to 2022.
Girard notes that in terms of premiums, sales of iA's simplified issue products totaled 16.3 million dollars, growth of 14.4 per cent over the previous year.
Customers predominantly favored permanent simplified life insurance. "In 2023, permanent policies accounted for 69 per cent of the premiums, while term policies made up 31 per cent," she specifies. According to Girard, the appeal of permanent products in covering final expenses upon death played a significant role in this distribution.
Growing need
We are experiencing a surge in this market. The client demand is growing.– Luc Bossé
At Assumption Life, Marie-Claude Thibodeau, Vice President of Actuarial and Product Development, reported that their simplified issue products saw a 62 per cent increase in terms of premium in 2023, compared to 2022, and the number of policies sold grew by 52 per cent.
"We are in the midst of a rise in this market. The client need is escalating," underlines her colleague, Luc Bossé, Vice President of Sales and Marketing.
"In an aging population, new medical conditions can complicate access to life insurance due to the selection process, which can take weeks with various reports and tests," he adds.
No ambiguity
Our claims experience helps us accurately assess risk. – Marie-Claude Thibodeau
Thibodeau highlights the experience gained by Assumption Life since launching the simplified issue product, Golden Protection, in 1994, available in both term and permanent versions. "Golden Protection is still available. We have our own data to work with the product. Our claims experience helps us accurately assess the risk," she explains.
She adds that the questionnaire for simplified insurance must be robust as it serves as the gateway to the product. Assumption designed it with the help of reinsurers to ensure it covers risks adequately without being overly complex.
Bossé emphasizes the importance of formulating questions that are easy for clients and their advisors to understand. "Our advisors tell us the questionnaire is simple, clear, and unambiguous," he reports.
Containing rates
Guillaume Fauteux, Vice President of Business Development and Marketing, Individual Insurance, Investment & Retirement at UV Insurance, recalls that the insurer launched its first simplified issue products soon after introducing its My Universe platform in 2020. Sales of simplified issue insurance now constitute 85 per cent of its business (see Insurance Journal, April 2024, page 12).
"We work hard to enhance awareness of these products and clarify simplified issuance to advisors," shares Fauteux.
We prefer to maintain good competitiveness to effectively serve a family-oriented and middle-class clientele.– Guillaume Fauteux
To maintain the competitiveness of previously offered standard rates, UV Insurance has capped the available life insurance amount in simplified issue at $500,000 for term and $150,000 for permanent insurance, for ages 18 to 45 (lower limits apply at older ages). "Beyond these amounts, the rate curve significantly increased. We prefer to maintain good competitiveness to effectively serve a family-oriented and middle-class clientele," Fauteux explains.
UV Insurance also discontinued its guaranteed issue insurance, a product aimed at harder-to-insure clients and more expensive than other simplified issue products. "This allowed us to lower the threshold for express issuance from $50,000 to $10,000, reduce prices, and democratize access by offering lower amounts," Fauteux elaborates.
To qualify for express issue insurance of up to $150,000 coverage, the individual must answer "no" to 15 questions. To exceed this amount in term insurance, the client must answer an additional 10 questions (25 in total) to be eligible for a process called immediate issue.
This article is a Magazine Supplement of the April issue of the Insurance Journal.
