There’s a flaw in selling kids whole life policy’s. What happens when Grandpa dies?

[Allen Trent]

Went threw this with foresters . They wanted a copy of death certificate and wanted copy of will and some type of court papers to change owner . It was crazy. The policy basically becomes worthless when the owner dies . The insured can never do anything with the policy as he’s not the owner . How do other’s handle this on kids policy’s when the owner dies? Do any co’s have a contingent owner transfer if the owner dies? This is a huge flaw . Any co’s allow easy transfer of ownership if the owner dies?

many policies & applications I have seen state the insured becomes the owner when the owner dies unless a different contingent owner was named. (many carriers require a contingent owner be named when a minor is insured. So, Grandpa is owner, maybe Grandma or Mother/Father are contingent owner.

have not seen this as an issue on policies written in the last 20-30 years as many began putting it in the contact/application that insured becomes owner at death of owner instead of the old ways of having it be part of the owners estate & need a probate document, etc

 

[walthamny]

It would be incorrect to call this a flaw. We are just selling life insurance, we are not doing complete estate planning. Any husband and wife you sell term insurance has the same issue when both die and each has named each other as beneficiary and no will. Or I run reviews and see that a child is named as beneficiary especially in 2nd marriages. Or you sell a term policy and marriage hits the rocks and the client goes online and changes the beneficiary to a minor without you noticing. Beneficiary review and what happens the day you die should be part of you workflow and also great way to collect referrals.

 

[DonP]

I meant a flaw for us selling low income people .The truth is the policy will be gone on the death of the owner . Low income people will not go to all that trouble to change ownership.These applications have no contingency owners . According to Rouse with United American all you have to do is show a death certificate and the child when of age becomes the new owner .

 

[rousemark]

I meant a flaw for us selling low income people .The truth is the policy will be gone on the death of the owner . Low income people will not go to all that trouble to change ownership.These applications have no contingency owners . According to Rouse with United American all you have to do is show a death certificate and the child when of age becomes the new owner .

but, even if the ownership is not changed and the premium stops, the policy is not worthless... Name a contingent beneficiary.. at the death of the owner/primary beneficiary let them know that policy will remain in force for x number of years... With UA on a 5 year old female where the premium for a $25K policy is paid for 15 years and then stops the "guaranteed term conversion" (extended term insurance) will keep the full $25K in force for another 34 years and 336 days. In other words if the child dies prior to age 55, the benefit of $25K will be paid.. Not bad for a plan that only cost $90 year.. Again, you need to encourage your owner to fill a final expense guide detailing what polices they own so the family will know..

 

[DonP]

Rouse Foresters doesn’t have a place on the form for a contingent beneficiary you can only name the owner or another person the primary beneficiary. The easiest way would be if the form had a place for a contingent owner if the owner passes . Unfortunately your wanting of the owner to have a memorial guide listing their wishes is noble . But as you well know the average fe client will go threw 2-5 different policy’s in their life .

 

[rousemark]

Rouse Foresters doesn’t have a place on the form for a contingent beneficiary you can only name the owner or another person the primary beneficiary. The easiest way would be if the form had a place for a contingent owner if the owner passes . Unfortunately your wanting of the owner to have a memorial guide listing their wishes is noble . But as you well know the average fe client will go threw 2-5 different policy’s in their life .

Don.. We just do the best we can do. We cannot consider ourselves responsible if the client will not act on our advice. As for the beneficiary with Foresters, carry some Foresters policyowner service forms and add a contingent beneficiary or even a contingent owner at the time you deliver the policy. Even if you don't normally deliver polices it is good to deliver juvenile polices as they present a great time to uncover other insurance needs or pick up referrals to other kids..

 

[rousemark]

While we are on the subject of juvie life policies, I had a fellow agent that had a UA contract tell me that a man could not make a living writing $7-8 per month polices.. I asked him if he had ever taken a look at UV's juvenile app and he said he had not. I looked at one with him and pointed out you could write 5 kids on one app. The each get their own separate policy but the applicant only has to sign one app and one bank draft form. You only have to enter the owner's info one time for one to five policies. Grandparents can buy the plan without the parent signature. You don't have to see the kids. The kids can live in a different stand as long as the applicant/ owner lives in a state where you are licensed. Can't get much simpler.. Saw him the other day and he was singing the praises of the UA kids plan. He had written four grandkids of one of his med-supp owners.. One kid lived in TN but the others lived in NY. The premium was $40.00 per month... $500 first year commission for 20 minutes work while making a service call.

 

[scagnt83]

We just do the best we can do. We cannot consider ourselves responsible if the client will not act on our advice.

Truth.

Doesnt matter what market you work. That statement holds true on all sides of this business.

Cant force someone to act. We can only give them the info and opportunity. Up to them.

Ive seen some baby boomers sit on very large sums of cash out of "fear of the market" or really fear of any investment that is not a bank CD. Even when shown how much in lost interest they have each year, and how severely it could impact their retirement, some choose not to act.

 

[DonP]

Rouse I think you meant the Grandparents can sign without the parents signing .But you do need the ss # of the Grand kid with UA vs foresters and moo you don’t . That could be cumbersome fir some people . No question these are easy sales . I’ll be honest when I’m selling Medicare and fe out of the same house I forget on the grand kids policy . Another nice thing is UA pays renewals . If your really hustling I think you could sell $10-$15 k premium a yr of these .

 

[rousemark]

Rouse I think you meant the Grandparents can sign without the parents signing .But you do need the ss # of the Grand kid with UA vs foresters and moo you don’t . That could be cumbersome fir some people . No question these are easy sales . I’ll be honest when I’m selling Medicare and fe out of the same house I forget on the grand kids policy . Another nice thing is UA pays renewals . If your really hustling I think you could sell $10-$15 k premium a yr of these .

Yeah.. That is what I meant I corrected it.. If only every grandparent was like my wife. She has the SS#s, birth dates, place of birth of not only all our kids, grandkids and great grandkids but also our kids and grandkids spouses..

I tend to get in a hurry to get out after making a sale myself. That is the reason that I usually deliver the policies using that time for other sales and referral opportunity.