Life Insurance

The production of insurance brokerage fee income per bank employee continued to rise through the first two quarters of 2009 to exceed year-end 2008 productivity by 12.5 percent, according to the Michael White-Prudential Bank Fee Income Report. The Annualized bank Insurance Program Productivity ratio rose to a new high of $2,674 per bank employee compared with $2,377 at year-end 2008.

Income per employee is a fundamental productivity measure in many businesses.

"Program Productivity enables us to assess the relative generation of a particular fee income among bank employees, the important human assets in generating customer referrals and the attendant fee income earned from customer relationships," said Michael White, author of the report.

The 12.5 percent increase in Insurance Productivity was the largest since 2003 when the ratio increased 16.0 percent from $1,778 per bank employee to $2,063 in 2004. Up 33.7 percent overall from 2003 through 2008, Insurance Program Productivity grew at a 6.0 percent compound annual rate from 2003 through 2008, and at 7.7 percent based on the annualized rate through June 2009.

"The substantial increase in income generated through bank employees was up significantly for the first half of 2009, and on an annualized basis reached a record high," said Joan H. Cleveland, senior vice president, Business Development with Prudential's Individual Life Insurance business. "This suggests that while consumers are increasingly careful about their spending choices, they view life insurance, along with other protection products, as an important component of planning for the future which is consistent with the findings of Prudential's survey, Taking a Pulse of American's Changing Life Insurance Needs that was conducted online between June 24 and July 1, 2009."

Similarly, bank Insurance Program Density has climbed. On an annualized basis, Program Density reached $140,186 at June 30, 2009, up 2.2 percent from $137,197 at the close of 2008. Program Density measures the amount of insurance program revenue per domestic banking office. It assesses the relative density of fee income among banking locations, the critical physical assets in generating program income. Up 42.5 percent overall from 2003 through 2008, Insurance Program Density grew at a 7.3 percent compound annual rate from 2003 through 2008, and at 7.1 percent based on the annualized rate through June 2009.

Compiled by Michael White Associates (MWA) since 2001 and sponsored for the first time by Prudential's Individual Life Insurance business, a member of the American Bankers Insurance Association (ABIA), the Michael White-Prudential Bank Fee Income Report measures and benchmarks the banking industry's performance in generating insurance brokerage and underwriting fee income. Results are based on data from all 7,402 commercial and FDIC-supervised savings banks operating on June 30, 2009.

Source: Michael White Associates,
www.bankinsurance.com

LOS ANGELES (AP) - A judge in Los Angeles has sentenced two elderly women to life in prison without parole for murdering two indigent men to collect insurance policies taken out on their lives.
Superior Court Judge David Wesley on Tuesday sentenced 77-year-old Helen Golay and 75-year-old Olga Rutterschmidt to two consecutive life terms each.
The judge denounced the women for their greed. He says the men they killed needed only food, water and shelter and thought the women were going to give them a helping hand.
Prosecutors say the women collected $2.8 million before their scheme was uncovered.

INTRODUCTIONLife insurance is a unique product. Like other insurance products, its primary purpose is to protect against loss. But unlike other kinds of insurance products, life insurance isn’t for you; it’s for your survivors. Life insurance has no uncertainties; if you’re covered by a life insurance policy — andthe company holding the policy has the resources to pay — you can pretty much bet that someday your survivors will receive a benefit. Knowing how much life insurance coverage to buy isn’t an easy decision; evaluating a car or a house is fairly simple, but how do you figure the value of your life?.
CHAPTER 1HOW LIFE INSURANCE DIFFERS FROM OTHER TYPES OF INSURANCE
 Dispelling life insurance myths Looking at the purposes of life insuranceLife insurance is simple, right? You buy a policy to protect your family, you die, your family gets some money. Simple. Direct. Easy. Not so fast. Life insurance is much more complicated than that. This chapter describes some of the myths that surround life insurance and takes a look at the main purposes of having a life insurance policy — not just as income for your survivors, but also as part of your investment portfolio, as a tax shelter, and as part of your estate planning. Myths about Life Insurance The following sections work to dispel the three main myths about life insurance.
Myth 1: I only need life insurance if I have kids Most people think that they need life insurance only if they have a family — to ensure that their survivors aren’t left hanging if they die prematurely.Life insurance is important for several other reasons, which you can read about in greater detail later in this chapter. Briefly, these other purposes are income replacement for a spouse to help him or her through a difficult adjustment period, as an investment, as a tax shelter, and as an estate planning tool.
Myth 2: Life insurance is a bad investmentLife insurance may not be the most profitable investment you can make with your money, but rarely is it a bad one. If you measure an investment only in how much you get in return, life insurance may or may not be a good investment. When you buy a life insurance policy, you put money into an account that will pay your survivors that same money, a portion of that money, or that money plus more when you die. If your survivors get more than you put in (or more than what the money could have earned elsewhere), life insurance is a good investment. If your survivors get less, it isn’t such a good investment. However, life insurance is much more than return on investment. Life insurance provides
 Protection for your dependents Peace of mind for you
If you’re looking for a pure return on capital, you can find many more lucrative investments — even tax-deferred or taxfree options — that can yield considerably more than your life insurance policy. But the primary function of insurance is not as an investment but as protection. No other investmentcan offer the same amount of protection. 4 CliffsNotes Understanding Life Insurance
Myth 3: Life insurance is unnecessary for older peopleNot very long ago, older meant “over 50.” But many people need life insurance at 50, 55, 60, or 65. Age is not always a reason to abandon life insurance. Even so-called “older” people may need income protection for their survivors if these heads of household or primary caregivers die prematurely. Peoplein their 50s and 60s (and sometimes into their 70s) are in their peak earnings years and have family responsibilities. You may want to give your loved ones the time to adjust to your death without having to change their normal standards of living. Today, many more people in their 50s and 60s are still supporting young children. If a woman has a child when she’s 40 or 42, for example, that child won’t finish college until Mom’s at least 62. Or suppose you have a non-working spouse and you die at the age of 60; he or she may not be able to find a job that brings in a comparable income to maintain the same standard of living. Many older people actually need more life insurance for a number of reasons: You may have less time to make up for the loss of income. You may find that inflation has cut into the value of the life insurance benefit. You have a greater need for estate planning as you get older because you have less time to carry out your plan. You have a greater need for tax planning as you age because you’ll most likely earn more, and life insurance can play a significant part in your tax planning.