The purpose of our latest study, Voluntary Lapse Rates, is to understand if and how carriers currently track voluntary lapse rates, whether at the account level, employee level or both. In addition to general lapse rates, carriers were asked to provide data regarding account-level lapse rates by group/case size and employee-level lapse rates by product, if applicable or available. They were also asked about their company’s voluntary lapse-rate trends over the last one to two years and any company concerns or areas of focus regarding voluntary lapse rates in the next three to five years.

The study found that the majority of carriers surveyed can measure and track lapse rates for voluntary business. Of these carriers, over one-third measure whole-life account lapses only, nearly 20 percent measure employee-level lapses only, and another one-third measure both at the whole-account and employee levels. A small percentage (10 percent) measure at the whole-account level and at an “other level” (at the distributor/broker level and by whole-account at the product level versus the funding level). One of the carriers surveyed measures and tracks lapse rates primarily at the “book” and distribution level because of selling only individual voluntary products.

Most of the carriers measure lapse rates on a 12/13-month timeframe. Of the 22 carriers surveyed, one measures at 4 months and six carriers measure lapse rates within a different (monthly or annually) or multiple timeframes. One carrier indicated that it measures monthly and at 3, 6, 9 and 12 months and another at 12 or 13 months, 24 months and annually.

Voluntary Lapse Rates is an Eastbridge Frontline™ Report. Eastbridge Information Partners as well as survey participants receive the Frontline™ Report free of charge. For more information regarding the Information Partner program or about Eastbridge reports, email the company at info@eastbridge.com or visit the website at www.eastbridge.com.

Eastbridge Consulting Group, Inc. is a marketing advisory firm serving insurance and financial services organizations in the United States and Canada.