Who is Dropping ROP ?

[BNTRS]

But we're missing the flexibility and asset class piece. If I want cash from the WL policy I can get it w/o leaving the policy. It's a great fixed asset where I can park additional money. Can't do these things with term. All ROP does is lessen the net cost vis-a-vis opportunity cost the LEAP people tend to go crazy about. It's not an alternative to whole life insurance, it doesn't even compare. It's still term insurance, a temporary solution with very limited flexibility. All you did by adding a return of premium option to it was add one extra feature. I don't think there's any debate to be had over wl or ROP term, they serve different purposes. But I would think the term pushers (especially the BTID guys) would hate ROP more than anyone.

It's a strange product and I don't see much practical application for it.

 

[lifesettlementadvisor]

UL policies with ROP riders are great. I've never understood why more people do not buy this product. You can still optimize your premiums to only pay COI + fees/expenses, but gain the benefit of an increase in NDB.

Yes the premium obligation is greater - but so is the upside.

 

[Jake07712]

When I was heavy into mortgage protection, I had a way to show a UL with the cash value, (a current interest rates), equal the total amount of premium after 20 and 30 years. I also showed cash value that equaled half the premium paid. If the client chose, they cold withdraw the money after 20 years and prepay the rest of their mortgage saving themselves all of that interest, or elect to keep the policy in force and have life insurance coverage, or, of curse just take the money out. It was a good alternative to term with ROP, and a lot more flexible.

 

[russelltw]

The problem I saw with term with ROP was that you could not miss a payment or two without lapse. If you did, you lost everything. With the UL, you had a little more flexibility. I did not see ROP much, but that's what I saw in my area.

 

[WinoBlues]

When I was heavy into mortgage protection, I had a way to show a UL with the cash value, (a current interest rates), equal the total amount of premium after 20 and 30 years. I also showed cash value that equaled half the premium paid. If the client chose, they cold withdraw the money after 20 years and prepay the rest of their mortgage saving themselves all of that interest, or elect to keep the policy in force and have life insurance coverage, or, of curse just take the money out. It was a good alternative to term with ROP, and a lot more flexible.

If I were showing a ROP Term against that I would ask the client if they wanted me to compare guarantees or the maybe numbers.

Then I would run a higher face with the same premium and one with the same face and lower guaranteed premium.

I have sold UL the same ROP way. Years later I have become more about what is guaranteed.