Top Life Producers Production, What's Your Opinion?

[Full Throttle]

A life agent with an integrated business model can build up renewal income beyond the life insurance. Disability, LTC, health, and group business pay decent renewals. Rewriting term and conversions offer income opportunities down the road. On the securities side, a significant renewal income can be buildt on that front as well over time. Lots of options so you're not continually chasing your tail on Jan. 1st each year.

 

[CFP83]

Most life income is first year commission. After the first year renewal income is only about 2-3% so if you made $100K a year in first year income each year for 5 years you would still only be receiving about 15,000 a year in renewal income.

Denny, I appreciate your input and participation on this little opinion survey, however your statement is "painting with a very broad brush". It sounds like you are an indy agent, and good for you by the way. I would also venture to say that you don't write much whole-life premium....here's what I mean:

Someone who writes an average of 100k of whole life premium for four years will have $40,000-$60,000 of renewal income the morning they wake-up starting their 5th year. Now, imagine someone who does more than 100k of premium over a 10yr career and we're talking a healthy six-figure income without selling one new policy.

Going back to the original post question now, you can see that writing 100k of FYC is different than making 100k a year in life total commissions.

 

[dennylobach]

Denny, I appreciate your input and participation on this little opinion survey, however your statement is "painting with a very broad brush". It sounds like you are an indy agent, and good for you by the way. I would also venture to say that you don't write much whole-life premium....here's what I mean:

Someone who writes an average of 100k of whole life premium for four years will have $40,000-$60,000 of renewal income the morning they wake-up starting their 5th year. Now, imagine someone who does more than 100k of premium over a 10yr career and we're talking a healthy six-figure income without selling one new policy.

Going back to the original post question now, you can see that writing 100k of FYC is different than making 100k a year in life total commissions.

I've never been an Indy agent (but I did write quite a bit of Amerus [same group] before they changed their name "to protect the innocent") and reduced my contract to 100%.


However you're correct on the whole life issue I wrote some some small whole life policies for two different companies but stopped writing for each after a few months...so they never paid me any of the renewals.

Other that that I've always written either UL or EIUL. So if the renewals on whole life are 5%-6% then that number would be correct...and I'd be receiving twice as much in renewal income.

Sounds like you do write whole life.

Be interesting to see what the result on WL vs. UL would be on a policy I'm shoping now. 75 yr old F NS, $600,000 guaranteed face, $40,000 1035 exchange, $15,000 annual premium. 10 yrs ago she was prefered NS with PRU, good health, has a little high BP now.

I can solve for this face and premium with UL with a number of A rated companies. How would WL compare?

 

[CFP83]

Be interesting to see what the result on WL vs. UL would be on a policy I'm shoping now. 75 yr old F NS, $600,000 guaranteed face, $40,000 1035 exchange, $15,000 annual premium. 10 yrs ago she was prefered NS with PRU, good health, has a little high BP now.

I can solve for this face and premium with UL with a number of A rated companies. How would WL compare?

No way that whole-life would even be suitable for that case unless a major objective was building cash-value....its sounds like the objective here strictly is guaranteed DB at the lowest cost, that's not what whole-life is built to do. Whole life is best used as a unique asset class that also provides guaranteed, stable death benefit.

 

[dennylobach]

No way that whole-life would even be suitable for that case unless a major objective was building cash-value....its sounds like the objective here strictly is guaranteed DB at the lowest cost, that's not what whole-life is built to do. Whole life is best used as a unique asset class that also provides guaranteed, stable death benefit.

That's what I had concluded.

But let me ask you a different question still concerning UL or EIUL vs. WL because I have never been able to get a clear definitive answer.

Most of the business I have done over the past 23 years are policies to accumulate funds for some purpose in the future especially retirement. (It’s funny that most every marketing company is now “Discovering this idea”., I liked the UL/EIUL because the revenue can be tax-free.

I have a library of books by all the authors Pamela Yellen, Nelson Nash, Doug Andrews, Patrick Kelly, Brett Anderson, Marion Snow, Terry Laxton etc. (If you mention one I haven't read believe me I’ll buy and read, along with anything on the web, last week I had this discussion with Be Your Own Bank http://www.bankonyourself.com/whats-the-rate-of-return-on-a-bank-on-yourself-plan.html/comment-page-2#comment-5207 today I was reading Infinite Banking: Why Not Use Universal Life?www.ufirstalliance.com/pdf/WhyNotULIBC.pdf,

However I never really cared what I presented to accomplish this. What the clients (and I, as I own 4 of these policies) wanted was the best vehicle to receive the most money, for the longest period of time, with the least taxes, the smallest amount of government red tape and the most to their heirs when they die.

WL believers usually conclude the discussion with “ whole life has more guarantees” , or “there is too much opportunity to not make payments” or “withdraw too much and the policy blows up” etc. but when I ask for a past 20-30 year historical comparison of WL to UL they never do the comparison. UL was created in 1979 so historical numbers with apples to apples policy activity. IE: if the WL policy has been paid every year then the UL would have to be treated the same etc.

Most presentations compare a policy to a variety of options why not a WL to UL? IF that comparison can’t be done how can any of the others be valid?

So why, all else being equal, or how or why would a WL provide the most money, for the longest period of time, with the least taxes, the smallest amount of government red tape and the most to their heirs when they die, than a correctly structured UL?

 

[BNTRS]

The magical, and much more important, discussion is how many do it year after year. Sounds a bit odd, but the variation is nuts. I can guarantee this, 99% lie about it.

 

[Full Throttle]

So why, all else being equal, or how or why would a WL provide the most money, for the longest period of time, with the least taxes, the smallest amount of government red tape and the most to their heirs when they die, than a correctly structured UL?

It may or it may not, I can't predict the future. WL wasn't created to provide spectacular investment returns. It's used to provide a permanent death benefit, a secondary benefit is access to forfeiture values. If you believe a portion of an individuals retirement savings should be in a safe, conservative vehicle with guarantees AND they have a desire for a permanent death benefit, then WL can be tough to beat for that portion. UL is another option for that portion, but with fewer guarantees (but possibly more upside potential).

Breaking down your statement:

Most money for the longest period of time - I can't predict the future. For the right client, a permanent death benefit can help accomplish this when combined with a SPIA, but it doesn't matter if it's UL or WL as long as it's in force.

Least taxes - comparing WL to UL here, taxation works the exact same.

Government Red Tape - not sure what you mean here, maybe you a comparing life insurance to an IRA with RMDs? Either way, WL and UL work the same from this stand point.

Most to the Heirs at Death - again, I can not predict the future. I like WL with PUAs for younger clients, UL with a NLG for older clients if cash value isn't a concern.

 

[dennylobach]

It may or it may not, I can't predict the future. WL wasn't created to provide spectacular investment returns. It's used to provide a permanent death benefit, a secondary benefit is access to forfeiture values. If you believe a portion of an individuals retirement savings should be in a safe, conservative vehicle with guarantees AND they have a desire for a permanent death benefit, then WL can be tough to beat for that portion. UL is another option for that portion, but with fewer guarantees (but possibly more upside potential).

Breaking down your statement:

Most money for the longest period of time - I can't predict the future. For the right client, a permanent death benefit can help accomplish this when combined with a SPIA, but it doesn't matter if it's UL or WL as long as it's in force.

Least taxes - comparing WL to UL here, taxation works the exact same.

Government Red Tape - not sure what you mean here, maybe you a comparing life insurance to an IRA with RMDs? Either way, WL and UL work the same from this stand point.

Most to the Heirs at Death - again, I can not predict the future. I like WL with PUAs for younger clients, UL with a NLG for older clients if cash value isn't a concern.

Good balanced points

Actually the Government Red Tape and the least taxes and most to the heirs is for a policy vs everything else.

I would just like to see the discussion of WL vs UL from a historical point of the last 30 years to compare the mstmoney for the longest period of time.

It would be great if average people in their 40's had enough to save in multiple options for 20 years or more but my experience is they get to do one thing. It seems to me that a minimum face maximum funded UL usually does a better job at accumulation. But like Ii said I'd still like to see the numbers.
- - - - - - - - - - - - - - - - - -

It may or it may not, I can't predict the future. WL wasn't created to provide spectacular investment returns. It's used to provide a permanent death benefit, a secondary benefit is access to forfeiture values. If you believe a portion of an individuals retirement savings should be in a safe, conservative vehicle with guarantees AND they have a desire for a permanent death benefit, then WL can be tough to beat for that portion. UL is another option for that portion, but with fewer guarantees (but possibly more upside potential).

Breaking down your statement:

Most money for the longest period of time - I can't predict the future. For the right client, a permanent death benefit can help accomplish this when combined with a SPIA, but it doesn't matter if it's UL or WL as long as it's in force.

Least taxes - comparing WL to UL here, taxation works the exact same.

Government Red Tape - not sure what you mean here, maybe you a comparing life insurance to an IRA with RMDs? Either way, WL and UL work the same from this stand point.

Most to the Heirs at Death - again, I can not predict the future. I like WL with PUAs for younger clients, UL with a NLG for older clients if cash value isn't a concern.

Good balanced points

Actually the Government Red Tape and the least taxes and most to the heirs is for a policy vs everything else.

I would just like to see the discussion of WL vs UL from a historical point of the last 30 years to compare the mstmoney for the longest period of time.

It would be great if average people in their 40's had enough to save in multiple options for 20 years or more but my experience is they get to do one thing. It seems to me that a minimum face maximum funded UL usually does a better job at accumulation. But like Ii said I'd still like to see the numbers.

 

[CFP83]

bumping this one.....

I just ran across this discussion again, the original question and this thread got a bit hi-jacked. What percent do you think make 100k fyc on life insurance only?

 

[hermans25]

$100k+ - 5% 100+ apps - 10% or I anticipate it would be boxy to do 100+ apps (traditional underwritten policies, not voluntary) and not boilerplate at atomic $800 to $1,000 in exceptional per policy. If you are indy, that puts should put you about $100,000 alike alive with the ancestors market.