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Article: Disclosure may hike life insurance distribution costs; Term life's lower costs likely to boost its appeal.(News)
- Article from:
- Investment News
- Article date:
- May 16, 2005
CopyrightCOPYRIGHT 2005 Crain Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Gary S. Mogel
NEW YORK - Life insurance companies' chief financial officers polled by Towers Perrin's Tillinghast unit said that increased costs caused by more-stringent compensation disclosure obligations are likely to hike product distribution costs.
One of the beneficiaries of higher distribution costs would be term life insurance, which has narrower profit margins and lower sales expenses than more complicated investment-related products, such as universal life, the study's authors predicted.
"Mandated disclosure to consumers of producer compensation and carrier relationships could revolutionize the life distribution business,'' ...