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Living benefit riders to life insurance policies: Pricing considerations and strategy
Adding benefit riders to policies provides meaningful coverage for those who need it, and carriers usually can do so at a relatively low cost.
The expected hedge cost for a hypothetical GLWB block (see Index Methodology1) is estimated to be 206 bps as of the end of August 2021, up 2 basis points from the previous month, driven by a decrease in long-term interest rates. The Index Methodology provides additional details about the assumptions and methodologies underlying the Milliman Hedge Cost Index.
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Hedge Cost Index August 2021
The expected hedge cost for a hypothetical GLWB block (see Index Methodology) is estimated to be 206 bps as of the end of August 2021, up 2 basis points from the previous month, driven by a decrease in long-term interest rates.
Daren Lockwood, Xiaohong Mo, Adam Schenck