7702 News & Updates

[scagnt83]

Why is there no threads about 7702. This is the MAIN TOPIC of the last two months. Every webinar is talking about band-aids companies are using or starting fresh products coming out in October. I see that starting in JULY commissions will be slashed. I also have seen an average amount of risk (pure insurance) being slashed up to 44%!!! 44% lower initial insurance for 30 y/o, 30% lower for 45 y/o, 27% less initial life insurance for 60 year olds. Performance will increase, yet the insurance company must make their profit as well.

What is your experience with the company you are working? Are you finding the same results? Which companies have bandaids and which have new products coming out and when?

Thank you all for your insight,

KozyInsure

The truth is that no body really knows exactly how this is going to shake out.

I just spoke to the regional director of a major mutual the other day.... they had extremely limited info on how IUL and WL will be impacted. They also said most carriers are still waiting on further guidance from the NAIC/IRS/etc. before announcing how new sales will be impacted.

Considering that this is an effort to boost profits for carriers by utilizing a lower guaranteed interest rate, I dont see how that correlates to lower commissions. If anything, it should keep them steady or increase comp slightly.

 

[KozyInsure]

Did you record this or get it in writing? I have not seen a WL policy in years with a guaranteed of 4.5%

Sorry, not recorded nor in writing. The quote was from Nicholas Gomez from American Income Life, also talking about Global Life.

I'm not contracted with them so I'm not sure what they are planning to do.

 

[KozyInsure]

If the regulations went into effect JAN 1st, 2021, couldn't policies that started this year be amended. It just seems like they don't know what the policy would be amended to just yet.

I have a separate question for the forum. Let's say I have an appointment with a client next week who has a WL policy. Would it be too bold to assume that the clients WL is now not offering 4%, but a floating near 2% rate. Or does previous year WL policies have the grandfathered in feature and they are still paying out the 4%. Does only the New WL policies have the floating G rate?

 

[KozyInsure]

This is a screen shot of a webinar talking about commission being cut. This is where I got the information from during the initial post.

 

[DHK]

If the regulations went into effect JAN 1st, 2021, couldn't policies that started this year be amended. It just seems like they don't know what the policy would be amended to just yet.

No. It's a contract and the rate is set in the contract.

I have a separate question for the forum. Let's say I have an appointment with a client next week who has a WL policy. Would it be too bold to assume that the clients WL is now not offering 4%, but a floating near 2% rate. Or does previous year WL policies have the grandfathered in feature and they are still paying out the 4%. Does only the New WL policies have the floating G rate?

Like many things in our business... "it depends".

Here's the deal as I understand it:
- Death benefit focused policies will have a higher minimum premium to secure a similar death benefit because the guarantee rate is lower.
- Cash value focused policies will have a lower net amount at risk between the cash values and the total death benefit.

It's not about the rate of return in the policies.

It's about how the guaranteed rate affects the plan for the policies.

 

[scagnt83]

If the regulations went into effect JAN 1st, 2021, couldn't policies that started this year be amended. It just seems like they don't know what the policy would be amended to just yet.

DHK is correct, a contract is a contract and its set at time of issue. Regulators would not allow that change to happen that way.

 

[Tahoe Ray]

This is a screen shot of a webinar talking about commission being cut. This is where I got the information from during the initial post.

Commissions aren't being cut, targets are going down (like @Allen Trent said).

Also, I'd love to know how Globe is #1. Northwestern and NY Life must do 5x the WL premium that Globe does. I could be wrong but that just doesn't sound accurate.

 

[scagnt83]

Also, I'd love to know how Globe is #1. Northwestern and NY Life must do 5x the WL premium that Globe does. I could be wrong but that just doesn't sound accurate.

NWM is the #1 in premium for 2020 from what Ive seen. Maybe Globe sold the most policies, but certainly not anywhere close to the most in premium.

And when you sell $10/m crappy fe policies... its not hard to sell a high volume. But you have to sell 50x more policies to match the same amount of premium.

 

[Chuckler]

Sorry, not recorded nor in writing. The quote was from Nicholas Gomez from American Income Life, also talking about Global Life.

I'm not contracted with them so I'm not sure what they are planning to do.

The only experience I've had with Globe Life was being "invited" for one of their "interviews", based on that experience alone I don't think I would ever involve myself with that outfit.