2 Months in . . . is Our Genworth Colony Term UL 30 Too Risky to Keep?

[Newby]

Yes it's just a straight UL. It has prefigured premiums to guarantee it for certain lengths of time and those premiums just happen to be competitively positioned to compare with term insurance. It's not term and it's not a hybred. It's UL. You can overfund it an increase the length or you can short fund it and shorten the length.

 

[WinoBlues]

You can also reduce the periodic premium by dumping in lump sums. Works as an alternative to non performing ULs. I have not tried it but believe you could also short pay them also.

 

[timcomp]

Yes it's just a straight UL. It has prefigured premiums to guarantee it for certain lengths of time and those premiums just happen to be competitively positioned to compare with term insurance. It's not term and it's not a hybred. It's UL. You can overfund it an increase the length or you can short fund it and shorten the length.

The following statements do not apply to the original poster as he states he intends to lapse the policy at the end of the 30 year term. However, overpaying in the first 30 years of this policy will reduce the premium required to keep the policy inforce after 30 years. As an example, with fictious numbers, if the insured pays the monthly $19 for the 30 years, the premium might increase to $100 monthly (or more) at the end of the first 30 years. However, paying $30 monthly in the first 30 years could reduce the monthly premium required thereafter to $85.
Also, the sustained low interest environment and valuation interest rate reduction in 2013 (and possible regulatory intervention) probably contributed to Genworth's decision to suspend sales of the 30 year Colony Term UL.

 

[VolAgent]

The following statements do not apply to the original poster as he states he intends to lapse the policy at the end of the 30 year term. However, overpaying in the first 30 years of this policy will reduce the premium required to keep the policy inforce after 30 years. As an example, with fictious numbers, if the insured pays the monthly $19 for the 30 years, the premium might increase to $100 monthly (or more) at the end of the first 30 years. However, paying $30 monthly in the first 30 years could reduce the monthly premium required thereafter to $85.
Also, the sustained low interest environment and valuation interest rate reduction in 2013 (and possible regulatory intervention) probably contributed to Genworth's decision to suspend sales of the 30 year Colony Term UL.

I intend to do a lot of things in 30 years. How many do you actually think will happen?

 

[whyme]

My Colony Term 30 UL doesn't mention anything about changing the policy to a life long UL... Hmm

 

[VolAgent]

My Colony Term 30 UL doesn't mention anything about changing the policy to a life long UL... Hmm

Assuming it is filed as a UL, it doesn't have to mention it. A UL stays in force as long as cash value is positive. They attached a rider to it that keeps it in-force during the first 30 years even if cash value is zero as long as premiums are paid in full and on time.

 

[me112233]

Hello Insurance Forums!

In addition, he's concerned that since this is a lapse-supported product (i.e. people canceling is how payouts are made) that the assumptions might be wrong and Genworth might have trouble making payouts.

Thanks!

Danger. Danger. Criminal alert. My state has a LAW on the books that makes it a criminal act for an agent to disparage the financial condition of another insurance carrier in a public way and/or in the process of trying to make a sale (and that law holds true even if the agent has absolute proof that the company will file for bankruptcy tomorrow). Your friend's suggestion that Genworth might have trouble paying its claims is an obvious case of questioning whether they are financially stable. I know you won't do it, but you could report his behavior your state's insurance commissioner, and at a minimum, the insurance commissioner fine him a few thousand dollars.

We agents can do that sort of shop talk among ourselves, but to make such an assertion in the process of trying to make a sale? That's just criminal -- literally. We all know that Genworth (the corporate entity, not the the individual insurance companies, some of which carry/carried the Genworth name) was experiencing financial issues back during the "bank crisis" of the late 2000's, sort of on the order of AIG. But between bailouts and selling off some of the companies to other business organizations, both AIG and Genworth survived. But something of highest importance is to note that the insurance companies themselves were never in real danger of bankruptcy, it was the holding companies that had done some creative financing to buy the underlying insurance companies that were having financial trouble.

 

[WinoBlues]

Danger. Danger. Criminal alert. My state has a LAW on the books that makes it a criminal act for an agent to disparage the financial condition of another insurance carrier in a public way and/or in the process of trying to make a sale (and that law holds true even if the agent has absolute proof that the company will file for bankruptcy tomorrow). Your friend's suggestion that Genworth might have trouble paying its claims is an obvious case of questioning whether they are financially stable. I know you won't do it, but you could report his behavior your state's insurance commissioner, and at a minimum, the insurance commissioner fine him a few thousand dollars.

We agents can do that sort of shop talk among ourselves, but to make such an assertion in the process of trying to make a sale? That's just criminal -- literally. We all know that Genworth (the corporate entity, not the the individual insurance companies, some of which carry/carried the Genworth name) was experiencing financial issues back during the "bank crisis" of the late 2000's, sort of on the order of AIG. But between bailouts and selling off some of the companies to other business organizations, both AIG and Genworth survived. But something of highest importance is to note that the insurance companies themselves were never in real danger of bankruptcy, it was the holding companies that had done some creative financing to buy the underlying insurance companies that were having financial trouble.

FYI, Post is over two years old.

Not going to reread this thread, however, what do you feel is the responsibility to a consumer in advising them about the options?

 

[AboutThatLife]

FYI, Post is over two years old.

Not going to reread this thread, however, what do you feel is the responsibility to a consumer in advising them about the options?

In MD, you can't. You cant speak on the financial viability of the company, nor can you inform the consumer their benefit is guaranteed by the guaranty corporation.

You can offer other companies, but you will have to find better reasons than financial viability.

 

[Tahoe Ray]

In MD, you can't. You cant speak on the financial viability of the company, nor can you inform the consumer their benefit is guaranteed by the guaranty corporation.

You can offer other companies, but you will have to find better reasons than financial viability.

I remember in 2008/09, when AIG was in the news, several states distributed bulletins that their current situation was not to be used by agents to twist out of existing policies.