Selling a life policy to a single mom.

[Allen Trent]

UTMA helps solve a lot of possible issues

I work for a captive company that doesn’t have an easy way to name a non-existent UTMA “John Doe, custodian for UTMA account for the benefit of X,Y,Z children of insured”

Do you see that commonly with carriers that they allow UTMA list beneficiary designation, especially for term policies that would be common for young single mom? if so, is it offered as a box that can be checked or must it be written out, etc?

 

[scagnt83]

I work for a captive company that doesn’t have an easy way to name a non-existent UTMA “John Doe, custodian for UTMA account for the benefit of X,Y,Z children of insured”

Do you see that commonly with carriers that they allow UTMA list beneficiary designation, especially for term policies that would be common for young single mom? if so, is it offered as a box that can be checked or must it be written out, etc?

Most do not have an easy way that I know of. Maybe entering a minors bdate triggers a new line on some eapps, idk. Some will actually contact the agent/owner if a minor is named, and ask if they wish to designate a Custodian under UTMA.

However, most carriers should be able to include the info if written in a cover letter. It is legal protection given to minors named in legal documents, so I dont think the carrier can deny the request unless in SC/VT.

And its not a non-existent account. The actual life contract would be a UTMA if listed on the Bene info. Then it would transfer into a bank account (either new or existing) that is a UTMA.

Its not something Ive done in a while. Early in my career when I wrote more of those policies, I didnt know about UTMA. Then one day a carrier asked about it when just a minor was named bene.

These days with eapps, it seems more difficult if not included. We could write whatever we wanted on paper apps, or write "see cover page", etc.

If it were me, I would put the minor as bene on the app as normal. Then send in a letter signed by the client to affix UTMA status and designate a Custodian.

 

[Life Hawk]

She’s in her late 20’s with two young children. She’s a friend of our family, she used to babysit our children when she was younger. Now I’m trying to make her understand that she needs to get some protection in case something happens to her. So many of these young parents are running around with young kids and without life insurance. And it’s so very inexpensive.
But anyway, my question is, is this where the beneficiary is a trust , an entity that ensures the death benefit actually goes toward the children rather than the children’s father or one of the insured’s family members, either of whom might misuse the proceeds. How does an agent instill confidence in the insured that their will will be done. Can someone explain how this happens during the application process? I am a health insurance agent and I hadn’t written that much life business but now I am starting to.
She doesn’t have a spouse to list as a beneficiary and what if she doesn’t have someone she can truly trust will do what’s best for her kids, should she die while they are young?

This is the question I always ask in cases like this. "Mildred, who is the person you trust the most to do what is right for your family if you die?"

Get the client covered, that's key. A beni can be changed very easily in most cases, and if she's young, chances are she will do this as she feels the need.

Don't over complicate the issue or she might decide to "think about it" which helps no one.

 

[scagnt83]

This is the question I always ask in cases like this. "Mildred, who is the person you trust the most to do what is right for your family if you die?"

Get the client covered, that's key. A beni can be changed very easily in most cases, and if she's young, chances are she will do this as she feels the need.

Don't over complicate the issue or she might decide to "think about it" which helps no one.

Exactly. Bene issues can be changed and worked out later. Bene issue is moot if you dont make the sale. Overcomplication for a younger client can make them "think about it".

 

[Allen Trent]

Exactly. Bene issues can be changed and worked out later. Bene issue is moot if you dont make the sale. Overcomplication for a younger client can make them "think about it".

Always said exact same thing about business life & buy sell that get hung up on perfection of ownership etc instead of getting some protection in place in the meantime

 

[selfgen]

Who would take custody of the kids?

Probably her mother would. Her mom would be a good choice for a bene, although after reading the replies, I may suggest the UTMA

 

[rousemark]

Probably her mother would. Her mom would be a good choice for a bene, although after reading the replies, I may suggest the UTMA

Keep it simple.. Use the mother.. It can always be changed after issue. Plus, if you start talking UTMA, she may assume you are implying the mother is not trustworthy. In that case, you never get the sale and she never gets the insurance. You never know how someone will interpret things that are said.

 

[scagnt83]

Keep it simple.. Use the mother.. It can always be changed after issue. Plus, if you start talking UTMA, she may assume you are implying the mother is not trustworthy. In that case, you never get the sale and she never gets the insurance. You never know how someone will interpret things that are said.

This is very true. Make it simple to start. Then once it is approved, talk to her about the UTMA. At that point its only 1 thing to consider vs. the many things to consider on the front end of buying life insurance.

One important thing to point out about a UTMA, the child retains ownership and full access at age 18. So if the parent desires oversight beyond age 18, the only way to do that is a trust.

 

[WinoBlues]

Another good thread.

On selling to single moms. I have sold to many. Some with minor children some with adult children. The fear of not being able to properly bury them is sometimes as urgent as coverage on themselves. Child riders cover that and more at about $8. Convertible child riders add to the story. Also selling the adult children is almost a given. Most policies will have an ABR, many agents do not explain the benefits. Explaining the reality of not simply waking up dead is bypassing an emotional reality.

As I mentioned I have many single moms on the books. Some of my most loyal clients. Some of my biggest fans and referrers. They are not all poor. They do not all stay poor. Multiple sales to them and their kids or parents. Single moms tend to know other single moms. Oh, and they remarry and want insurance on the new husband.

Single moms are a part of my book that just keeps on giving.