Premium Financing: An Option For Disappointed Life Insurance Policyholders
July 13, 2021 by Michael Seltzer
A decades-long period of falling interest rates has created a challenging environment for most life insurance companies to meet the expectations of their longtime policyholders. Insurers who find they cannot achieve the projected targeted investment returns on these policy blocks are forced to reduce dividend rates, impairing policy performance.
For instance, in the whole life marketplace, affected policyholders have experienced a decline in dividend rates from a peak of as high as 11.5% in 1989 to as low as 4.25% this year.