Why Ordinary Life Is Taking On The Mantle Of Cutting Edge

The good thing is, considering the extremely sudden nature of this years outside "stimulus," the insurance industry has its new cutting edge product "ready to go," as it were. After all, the industry has ordinary life pretty well refined. It comes in many traditional and variable versions. It is equipped with many custom tailoring riders.

But can the industry do more? Can it refresh the product, make it truly new?

Yes, it can. For instance, adding critical illness riders to the producta trend still in its infancywill make ordinary life do double duty. It will enable owners to receive benefits while alive (if critically ill) as well as allow their heirs to receive proceeds at time of death. That will increase its security-building aspects.

Another major refinement has to do with the use of the proposed new 2001 Commissioners Standard Ordinary Tables.

As you know, CSO Tables are required in the United States for establishing reserves and cash values. The present tables (the 1980 CSO) are badly out of date. After years of study, and intensive work since September 11, the new 2001 CSO Tables are ready. At the moment of this writing, it appears they will be officially adopted later this month.

That means the industry will be able to come up with a better product for the American public.

The new Tables demonstrate that the industry (including its regulators) is not stodgy but modern. At a time when the whole country is under stress, it is moving forward with much-needed innovation.

John M. Bragg, FSA, ACAS, MAAA, is actuarial consultant at John M. Bragg and Associates, Atlanta; past president of Society of Actuaries; and past CEO of Life Insurance Company of Georgia. You can e-mail him at [email protected].

Reproduced from National Underwriter Life & Health/Financial Services Edition, December 10, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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