Report: life insurance policy lapse rates at a 20-year low
July 5, 2016 by LifeHealthPro Editors
Lapse rates on ordinary life insurance products, which were between 5.3 percent and 5.9 percent in 2012-2015, represent the lowest rates in nearly 20 years, according to a new report.
An A.M. Best Special Report, “Anemic Yields Put Spotlight on Retention,” reveals that ordinary life persistency has been relatively steady, fluctuating between 81.1 percent and 86.5 percent from 1997 to 2016, a trend that correlates with the U.S. unemployment rate. The last two years have seen the highest persistency rates in nearly 20 years, around 86 percent.
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