FE - Credit Cards and Direct Express Cards

[HoosierLife]

Which was sort of my original point. I can understand the resistance to pre-paid cards. I can even understand some resistance to DE cards by insurance companies.

Not so much the debit/credit card. Other than they can be hacked and do expire and then that's a pain in the ass. Yes, I know this is why auto deduct is preferred.

I would also think most people today (although lets say under the age of 60) check their balances and things online. I remember reading somewhere that some smaller banks are not even issuing checks now.

Most debit cards expire, what every 2-3 years. Five at the most. If you took all those debit cards, I could not imagine the amount of service work and persistency issues after a few years in the biz.

I'm dreading 2021 when all the DE cards expire

 

[BibH]

Forget the expiration date. They will lose the card at least every 1-2 yrs. I've had at least 7 or 8 lost de cards in the first yr. Hoosier i hardly doubt you'll be chasing anyone down for $3 a month. If anything you'll let it lapse and rewrite it.

 

[VolAgent]

Forget the expiration date. They will lose the card at least every 1-2 yrs. I've had at least 7 or 8 lost de cards in the first yr. Hoosier i hardly doubt you'll be chasing anyone down for $3 a month. If anything you'll let it lapse and rewrite it.

Which is the issue for the companies. I'm sure Newby has more precise numbers, but if an FE policy isn't on the books for 5 or 6 years, the company really hasn't made any money. After commissions, renewals, premium tax, underwriting expense, reserve and reinsurance, servicing the policy, etc. it takes a number of years to actually be profitable.

And quite frankly, most agents are only going to put in so much work to save a policy that is only paying renewals. Many barely save those still paying FYC.

 

[BibH]

Correct vol agent. I've read persistency rates for fe at the 5 yr mark are less than 30%. Thats why you never hear Fe producers talking about renewals. My appt setter has a top agent age 67 who's been doing fe 12 yrs and he has to hustle every week just like when he started. I'd advise any young agent to start off mixing med sups in with fe then at yr 5 transition over to mainly med sups.

 

[Newby]

Which is the issue for the companies. I'm sure Newby has more precise numbers, but if an FE policy isn't on the books for 5 or 6 years, the company really hasn't made any money. After commissions, renewals, premium tax, underwriting expense, reserve and reinsurance, servicing the policy, etc. it takes a number of years to actually be profitable.

And quite frankly, most agents are only going to put in so much work to save a policy that is only paying renewals. Many barely save those still paying FYC.

Yes 5-years to break even is what I'm told. I can't even imagine how they break even at that point because on your list of expenses you left out a big one. Paying claims has to be huge. Some people die early in the policy.

I don't understand the problem that this thread is discussing though. All you guys that don't use checks and just use a check card, you still have a checking account number don't you? The agent should just tie the payment to your checking account rather than your debit card and he's good.

I know that's not the case with debit express people but your normal everyday person that just doesn't use checks anymore should be no problem.

And why the hell live like that anyway? Why not use a REAL charge card and pay it in full every month? You have much better protection and benefits. I've never understood why anyone would use a debit card but that's just me.

 

[VolAgent]

Yes 5-years to break even is what I'm told. I can't even imagine how they break even at that point because on your list of expenses you left out a big one. Paying claims has to be huge. Some people die early in the policy.

I don't understand the problem that this thread is discussing though. All you guys that don't use checks and just use a check card, you still have a checking account number don't you? The agent should just tie the payment to your checking account rather than your debit card and he's good.

I know that's not the case with debit express people but your normal everyday person that just doesn't use checks anymore should be no problem.

And why the hell live like that anyway? Why not use a REAL charge card and pay it in full every month? You have much better protection and benefits. I've never understood why anyone would use a debit card but that's just me.

Not exactly, I included reserves and reinsurance, which is money to pay claims. If claims handling is included typically included in that number I do not know. I would say somewhere in the second year of the policy money should start flowing to reserves. Alvin at Trinity has said in the past that third year deaths are the worse. Can't investigate to rescind and barely any premium to pay claims.

And yes, I completely agree about bank account vs debit card vs credit card. Consumer protections are stronger on credit cards, plus in case of fraud or disputed charges, you don't have to wait for the bank to put the money back. The credit card company simply removes it from the bill until resolved.

 

[SPUR CITY]

Anyone I have ever asked usually says between 5-8 years.

I have a friend who recently started his own insurance company from scratch. He won't mess with final expense products anytime soon until his company is profitable selling other products to get the ball rolling. WL for Younger people are where the money is at for some companies. Low risk of mortality and potential lifelong premiums. SMART!

 

[BibH]

70% of the people i see with debit cards have no credit cards.There use of debit cards is an extension of the direct express cards they had before having any account. But getting back to the op's question i'd say 50% of people that use debit cards don't know their checking account #.

 

[HoosierLife]

70% of the people i see with debit cards have no credit cards.There use of debit cards is an extension of the direct express cards they had before having any account. But getting back to the op's question i'd say 50% of people that use debit cards don't know their checking account #.

I don't see that problem. If they have a debit card I'm getting the checking account number somehow. Even if I have to get them to dig through their original paperwork from the bank that's underneath the stack of garbage on their table. They'll have those 3 starter checks!

 

[BibH]

I was saying they don't readily know their account #. If i have to drive them to the bank i will.