The U.S. debt crisis will have serious impacts on the insurance industry. With the credit quality of the U.S. having a negative outlook, insurance companies are facing increased risk themselves.
A.M.Best recently reported on what downgrading of the financial strength of the U.S. would have on the Â portfolios and the financial strength of U.S. insurance companies.
Bottom line is that the insurance companies profit from their investments. If their investments are performing poorly due to negative outlook or poor economy, they will have to find another way to increase revenue.
The easiest way for life companies to do so is to be tougher on underwriting. Insurance companies can control this like flipping a switch. Getting tougher will not impact the top 7% who would qualify for the best rates. But it would impact people with even minor personal health or life style risk. By â€œflipping the switchâ€ the insurance companiesÂ will increase profits and lower their financial risk.
If you are shopping out your current insurance or getting quotes for new life insurance. Make sure you disclose all your medical and lifestyle information to an experience agent before choosing the best company for you. It is expected that insurance companies will get tougher and each company will choose different areas to get tough.