I'm looking to write my own whole life policy. Narrowed it down to Penn and Mass Mutual. May need to access loans down the road but not 100% sure. I've read posts that say non direct is just a marketing hype and that the non direct vs. direct argument is pointless. Both illustrate well around 4.5% projected long term IRR. However if loans are taken Penn, being direct, will be lower but Mass IRR will remain unchanged. Any thoughts on why to use direct recognition? Can wrap my head around it. Seems like non-direct is no brainer but what are the negatives of non-direct policy?
Non Direct Vs Direct Recognition Whole Life
- Thread starter heynow5
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If you don't understand it why are you writing your own policy? You are obviously not qualified to do so, even though you may be licensed. This is also your first posting on this forum. Can you give more information on your background so that we can respond. How long have you been in business? There are actually very good postings on this forum explaining the difference with all the pros and cons.
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A little hard on the beaver don't you think? Just a simple question that requires a difficult answer. Maybe you should stick to selling over priced variable annuities. The fact that you sell more va than mutual funds explains a lot about a man.
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First, he's right. If you don't know the answer, you're not yet qualified. However, I suppose you're looking for a straight answer.
Direct Recognition vs. Non Direct Recognition
Second, you're wrong about someone wanting to sell more VAs than mutual funds. You don't know what you don't know. Plus, this is an INSURANCE forum. We talk about annuities here.
Direct Recognition vs. Non Direct Recognition
Second, you're wrong about someone wanting to sell more VAs than mutual funds. You don't know what you don't know. Plus, this is an INSURANCE forum. We talk about annuities here.
YourFamilyBank
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- 46
I'll answer you directly.
Most of the time, NDR companies have a lower dividend than DR companies for obvious reasons. I can go on and on about how or why that matters. Obviously, if you don't touch the money and let it grow then a DR company with a higher crediting rate will put out more growth - just math. If you are going to use the money on a planned basis - i.e. business use, buying real estate, etc.. - then NDR is way to go. If you may just use it here and there unplanned - then NDR vs DR won't matter in the least long term for you.
Penn credits great long term - very strong. Mass as well and you can pick your loan type to create NDR with them.
That being said, if I'm not planning on borrowing except for exceptional cases, then I'm looking IUL that has a 100% participating loan provision - same as NDR - so I catch the higher growth in the market if that's my goal. Or do a combo of both.
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- #6
Thank you. Nothing wrong with VAs just my opinion that if the commission was the same as a mutual fund it wouldn't get sold.
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To: Your Family Bank. Are you part of the program that uses MTL and Assurity to pay off debt and mortagage? If so why not use NDR since borrowing is planned?
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To: Your Family Bank. Are you part of the program that uses MTL and Assurity to pay off debt and mortagage? If so why not use NDR since borrowing is planned?
The person who posted this question did not have any prior questions. If he is a customer trying to do things on his own, my answer while rough is right on the money. If he is agent new in the business, then there are better ways to ask a question here. As for the high priced VA"s that I sell. When I was captive with NY Life, all the VA's I sold were high cost. Since I have been independent RIA, I only sell Variable Annuities through Jefferson Pilot or Vanguard. Vanguard has no surrender charge on their VA's and only their index funds, fee is around 0.5 on average, Jefferson pilot has a surrender charge and their fees are just a little higher than Vanguard(more fund choices). My fee can be based on AUM, flat fee or an hourly rate, I discount it for people on Social Security or when they are in financial difficulty. My fees are easily in the lowest 5% of all advisors. If you send me a private message, I can also mail you my ADV. As a RIA, I would not be able to sell a high fee VA under most circumstances.I am already under the fiduciary standard, most advisors here are under the suitability standard.
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YourFamilyBank
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Yes, I am the National Sales Director for YFB (the program). That's a longer answer than I can type here (fingers might fall off), but we also use a NDR company for larger planned cases - $100k plus premium cases.
How did you hear about YFB?
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