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Thats not what it said in the last foeresters cerificare I read. I don't remember exactly what it said but it sounded like they could change the premiums or oass the extra cost along to the member somehow.
Competing Against Globe Life
- Thread starter dallas1
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Thats not what it said in the last foeresters cerificare I read. I don't remember exactly what it said but it sounded like they could change the premiums or oass the extra cost along to the member somehow.
- 1,931
This is my take on whole life premiums. Premiums in a WL policy can be guaranteed not to change but a WL policy can also be built to have changing premiums. Set or guaranteed premiums is not a definition of Whole Life but is a feature of traditional WL policies..
Whole Life is how the thing is built. Helps to understand the dif between WL and UL. Three basic elements, premiums, death benefit and cash value. With WL they are together and written in stone as to what they are. With UL they are treated separately and allowed to change in unspecified ways. You can't change the premium or death benefit in a WL policy but you can in a UL policy. If you change the death benefit it changes the premium and vice versa.
So I believe what makes a Whole Life policy a WL policy is the foundation. It is a set foundation that spells out exactly what happens. So the premium in a WL policy can change, like be lower in earlier years but this is spelled out and can't be changed. It is set. With UL you can decide later if you want to change something.
I'm no expert but that is my understanding.
Whole Life is how the thing is built. Helps to understand the dif between WL and UL. Three basic elements, premiums, death benefit and cash value. With WL they are together and written in stone as to what they are. With UL they are treated separately and allowed to change in unspecified ways. You can't change the premium or death benefit in a WL policy but you can in a UL policy. If you change the death benefit it changes the premium and vice versa.
So I believe what makes a Whole Life policy a WL policy is the foundation. It is a set foundation that spells out exactly what happens. So the premium in a WL policy can change, like be lower in earlier years but this is spelled out and can't be changed. It is set. With UL you can decide later if you want to change something.
I'm no expert but that is my understanding.
- 19,041
I believe it's taken from the death benefit when the insured dies. I seem to remember reading that about Foresters. I don't know if that the case on all fraternals.
Anyway, they cannot raise the rates on whole life. The certificate guarantees are the same as policy guarantees.
Now, do I prefer policies over certificates? Yes, all things being equal I would write a policy over a certificate.
But in my experience, which is 10 years and not a lifetime like many on here, I've had far more problems with companies that issue policies than with companies that issue certificates. Shenandoah jumps immedaitely to mind but also AmAm, LH and 5 Star. F&G was no picnic either. Can they get much worse than Forethought? They issue policies, sometimes.
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You misread it. Page 16 is waht you are referring to. That's the page you can use to replace a Foresters but it does not say that they will or can raise the premiums.
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Foresters raised premiums in the early 1900's. Looking for where I read that.
Found it, link below and question #9.
http://forestersiwant.com/pdf/405369_CAN_US.pdf
Found it, link below and question #9.
http://forestersiwant.com/pdf/405369_CAN_US.pdf
- 19,041
100 years ago they had an assesment on cetificates issued before 1898.
Even that link says that the contact cannot be changed.
I'm not a Foresters fan at all but using stuff like that to say they will raise premiums is wrong.
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It says Constitutional amendments cannot change contracted for BENEFITS. Doesn't say it can't change the premiums and they obviously can as they already did, even if it was many years ago.
None of this comes into play with an insurance policy. Just saying. lol
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Below is the legal jargon for certificates. From that it looks like raising premiums is the only option.
Any changes, additions or amendments to said articles of incorporation, constitution or by-laws duly made or enacted subsequent to the issuance of any certificate, other than a certificate or contract providing variable benefits pursuant to a separate account, shall bind the member and his beneficiaries, and shall thereafter govern and control the agreement in all respects, except that no change, addition, or amendment shall destroy or diminish benefits which the society contracted to give the members as of the date of issuance.
If they can reduce the death benefit, that is a defacto rate increase.. The policyowner is paying the same premium for less coverage.
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OK, if you guys want to live 100 years ago then go ahead. There is enough to not like about Foresters to not have to use 100 year old law changes.
But whatever turns your crank.
I am not speaking of Foresters.. Have nothing for or against them.. Have never dealt with them.. But the fact is that a certificate is not the same as a policy when it comes to guarantees.. If it were they would just issue a policy.. The fact that a Fraternal can issue an assessment can be as much a positive as a negative.. While no one likes the idea of paying more (in outlay or reduction of benefits), they can use the power of assessment to keep a company from going under. Insurance companies do not have that option available.. They do have the guaranty fund but anybody that has dealt with those can tell you they can be a nightmare.. especially if it involved an adjustable premium product like UL.
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It s just a discussion, JD.
Ohio requires anyone buying from a Fraternal sign a statement that in part reads: "If there is an impairment of reserves, a certificate holder may be assessed a proportionate share of the impairment."
From DOI: Fraternal benefit society insurance benefits are legally required to be assessable. In the event that a society’s claims paying ability becomes impaired, the members may be required to pay their proportional share of the deficiency. This is in keeping with the longstanding traditional status of fraternal benefit societies as charitable and benevolent organizations, as to which the members are both recipients of and providers of mutual benefits among the membership as a whole.
Fraternal benefit societies are subject to significantly reduced capital and surplus requirements, and are not rated by A.M. Best or an equivalent.
So how do they assess a cert holder? How do they collect it?
What has you thinking the law changed in the last 100 years so they can't raise premiums now?
I was always under the impression they do it by raising premiums and want to know if that is not the case. And as I have and do sell Fraternals I want to know what is fact.
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