Why Corebridge Embraces Term Life
What You Need to Know
Writing term life takes a big, efficient company.
Corebridge has about $370 billion in assets under management.
It now makes more than 60% of its life underwriting decisions using automated systems.
Corebridge Financial likes selling permanent life insurance policies and also enjoys selling term life insurance.
Tim Heslin, president of life insurance at the Houston-based life and annuity giant, talked in a recent email interview about the company’s strategy in selling a product that some competitors have dismissed as a commodity.
“We’ve been expanding our footprint in term life, staying competitive on pricing and making important advances in our underwriting process,” Heslin said.
Corebridge is big: It’s the company that American International Group formed to hold its life and annuity operations. Corebridge ended the second quarter with $370 billion in assets under management or administration, and it generated $3.5 billion in life insurance premium revenue in 2022.
Some insurers prefer to sell clients life insurance products designed more for use in long-range planning arrangements than for immediate death-benefit protection, but others still think that helping younger clients get the maximum amount of death-benefit protection per premium dollar is good business.
Life Happens organizes a Life Insurance Awareness Month campaign every September — in an effort to help consumers see that their financial support is important to their loved ones — and that insuring their lives is a sensible way to protect them.
Many life insurers, however, focus mainly on selling whole life insurance, indexed universal life insurance and other types of “permanent life” policies, or “cash value” policies, designed to stay in place for a client’s entire life and to build up cash value to pay expenses likely to occur far in the future.
Permanent policies provide affordable death benefits for clients later in life but look expensive to young workers who simply want affordable protection against the small chance that they could die early.
A term life policy is designed to stay in effect for a term that lasts a specified number of years, such as 10 or 20.
A term life policy builds up no cash value, and the coverage is usually structured in such a way that the insurer can increase the premiums at the end of the term, when the insured may be older and have a greater risk of dying. Because of that structure, the premiums for young workers tend to be very low.
Heslin, who has a bachelor’s degree in math from Binghamton University and holds the Fellow of the Society of Actuaries professional designation, began working for AIG in 1999. Corebridge started separating from AIG in 2021, and Heslin has been the Corebridge president for life insurance since then.
He celebrated Life Insurance Awareness Month by answering questions, via email, about life insurance at Corebridge and in the U.S. life insurance industry. The answers have been edited.
THINKADVISOR: What do you think about the state of competition in the individual life market?
TIM HESLIN: Outsiders might think of life insurance as a relatively quiet industry, but all of us in the mix know the competition is always on.
That’s a great thing for financial professionals and insurance agents who are wanting to bring their clients better products and solutions. Each provider has its own focus and its own strategy.
For Corebridge, our partners look to us primarily for term and indexed universal life. We are also strong in guaranteed and simplified issue whole life products for final expenses.
Term life insurance has seen several interesting developments.
This product has always required providers to have a strong balance sheet to support the capital demands associated with this business.
Some companies have recently decided to shift their focus away from term, often because they do not have the scale needed to write the business efficiently. But we believe the opportunity is still there, especially with the growing life insurance protection gap and increased awareness of life insurance needs.
Economic conditions and the interest rate environment have been favorable for annuities. Have agents, brokers, financial planners and others seen this affect life insurance sales?
Annuities have been making headlines in today’s market, but many financial professionals realize that rising interest rates have also had a positive impact on life insurance.
