Unfortunately insurance man when an agent walks in the house with a SL policy nobody remembers that. Also most policy's issued with many carriers Peferred are Standard with SL. That means I can almost get a 100% more coverage with another carrier. I forgot with no mib or rx check many SL agents clean sheet . Even SL preferred rates are 30-40% higher than most carriers.
There Can Be Only One
- Thread starter VolAgent
- Start date
You still paying the 20% lifetime renewal?
Greg, It was not my intention to knock the program but to answer the question how the company could lock in the costs. The thing your example did not take in consideration was the time value of the money. The company is also going to receive an investment return on the cost of the program.
As to most families not knowing about the plan's existence 80 years down the road? Think that is a safe assumption..
In fact, I would many times the family will only look for an insurance policy and have no idea what the legacy plan even if they find the paperwork. However, far more plans will never pay simply because they are not in force at the time of death. If the insurance policy lapses it is doubtful they will continue to pay for the legacy plan. Unlike the insurance policy, the legacy plan will have no nonforfeiture values to compensate for the money paid to that point. 100% of those payments remain with the company... Not necessarily a bad thing but it does help cover the costs on the casket, vault and monument services they actually provide.
I can see the plan as a good talking point and I think it could have some value to the families.
BTW, do you have any cold hard metrics to prove my statements wrong?
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Greg, It was not my intention to knock the program but to answer the question how the company could lock in the costs. The thing your example did not take in consideration was the time value of the money. The company is also going to receive an investment return on the cost of the program.
As to most families not knowing about the plan's existence 80 years down the road? Think that is a safe assumption..
However, far more plans will never pay simply because they are not in force at the time of death. If the insurance policy lapses it is doubtful they will continue to pay for the legacy plan. Unlike the insurance policy, the legacy plan will have no nonforfeiture values to compensate for the money paid to that point. 100% of those payments remain with the company... Not necessarily a bad thing but it does help cover the costs on the casket, vault and monument services they actually provide.
I can see the plan as a good talking point and I think it could have some value to the families.
BTW, do you have any cold hard metrics to prove my statements wrong?
Yes I do, please read the following.....
Didn't say you were criticizing Legacy Assurance. But you just don't know what you just don't know.
When a client enrolls into Legacy they get a laminated membership card and membership kit which they keep with their policy. Their selections for the casket, etc. that they prefer is stored in a data base at Legacy Assurance. When death happens Legacy can show the family what the deceased picked as far as the casket, vault, and monument they wanted. Even though Legacy Assurance and Sr. Life are 2 separate companies, all Sr. Life has to do is let Legacy know there is a death claim and then Legacy does their own separate thing. That way even if the client's Legacy Assurance membership is lost the family still enjoys the savings.
I explain to Ms. Jones there is no arguing at the funeral home. No one's gonna say "let's get momma this casket here" and someone else saying "no, let's get this other casket over here". Ms. Jones has picked out what she likes and that's what's going to the funeral home. Makes things go simpler on the saddest day of her children's life.
And for someone on a plan with a waiting period, their Legacy savings start immediately. ON THE VERY FIRST DAY, Ms. Jones has lowered her funeral bill about $3000! ($6500 at the funeral home versus $3500 via Legacy). It's just like she just got a $3000 immediate coverage life insurance policy with NO contestability! Even though she has Aids, is on kidney dialysis, being treated for cancer, and just got out of the hospital last week from a stroke. No one in the country has a plan that can do this for Ms. Jones.
As far as the time value of money for the casket, vault, and monument....
LEGACY:
Today is $3500
80 years down the road is $6380. Price has not even doubled over an 80 year span! (Can you think of anything else that will not be doubled in price over an 80 year span)? I sure can't.
FUNERAL HOME:
Today is $6500
80 years down the road....maybe at least 5 times as expensive. If you use "the rule of 72", if interest rates are only averaging 3% the funeral homes's price will double in just 24 years! If anyone's not familiar with "rule of 72" just google it.
As you may now see, the "time value" of money is clearly superior using the Legacy Assurance method versus the Funeral Home method. It's also far superior to any non-forfeiture values you were referring to.
Rouse, why don't you get contracted with me and use Legacy Assurance as an add on to all of your clients. Great add on to cancer, FE, and any other clients you may have. You'd have zero lead costs cross selling your books of business. In fact, any FE agent could get contracted for the sole purpose of selling a small Sr. Life policy so their client can get a membership into Legacy and enjoy the savings. It's a fairly easy add on if presented correctly. I had a P&C agent doing this same thing with her book of business.
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Still have to admit price vs price its just not a competive product. And does legacy assurance have any legal guarintee that a life insurance compan does?
Greg: You took me to task saying I provided no hard facts to back up my assumptive statement saying, "Just the Facts, Sir." All that is well and good but you still haven't provided any facts or even opinions in what percentage of plans sold actually result in a casket and other items being provided. I think I am safe in assuming very few simply because that is the same answer as to the number of insurance policies that actually result in a claim. In the case of term insurance the stats are only 2% of the polices result in a death claim and whole life is not much better.. Even if the company had a 50% death claim ratio over the lifespan of their policy that would still mean 50% of the Legacy plans provided no benefits.
Still not saying it is a bad concept and I think you should provide a link to the testimonial video you sent me for others to see. I found it impressive. As far as your suggestion, it is worth considering in my opinion. (have no facts to back that up..
) .
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Greg is the gimmick available without the producer contract for someone in a state senior life isn't licensed.
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Here is how those things usually work. The insurance company is separate (at least legally on paper) from the casket/vault provider. They sell the fire out of the overpriced insurance using the percieved extra value. During the first 20 years or so they have no problem supplying the merchandise because that's still profitable. It's not even a great deal at that price.
But when too many years go by and they are no longer making a profit on the merchandise (due to inflation) they just bankrupt the casket company with no damage or liability to the insurance company at all. It's been done over and over through the years. It always works the same way. The fine print of the contract will say that if senior life's casket provider goes under the insurance will stay in force but they have no further obligation on the merchandise.
Do your research. A couple of them that have done it before were Commonwealth Life Insurance Company. Thousands and thousands of those policies are still floating around. And the cover page will say it guarantees to cover the casket and the burial vault. Guess what it doesn't anymore.
The Am Vets advertised a plan directly to Veterans for many years and guaranteed it. It failed and that one when it was failing got embezzeled on the way out.
I assume the original Huff-Cook Burial association was a similar set up. There were numerous burial associations back in the 1960's and 1970's with similar set ups.
People who claim they can lock your price in on something today that you will need decades later are either pulling a fast one OR have zero understanding of basic economics. Unless they take the money at today's cost and invest it in a way to keep up with inflation. It is my understanding that Senior Life's merchandise provider company does not recieve any money (beyond the few dollars per month possibly )until the death occurs.
This is just me making assumptions. I have no insider knowledge of Senior Life or their plan. But I've seen it play out a few times.
But when too many years go by and they are no longer making a profit on the merchandise (due to inflation) they just bankrupt the casket company with no damage or liability to the insurance company at all. It's been done over and over through the years. It always works the same way. The fine print of the contract will say that if senior life's casket provider goes under the insurance will stay in force but they have no further obligation on the merchandise.
Do your research. A couple of them that have done it before were Commonwealth Life Insurance Company. Thousands and thousands of those policies are still floating around. And the cover page will say it guarantees to cover the casket and the burial vault. Guess what it doesn't anymore.
The Am Vets advertised a plan directly to Veterans for many years and guaranteed it. It failed and that one when it was failing got embezzeled on the way out.
I assume the original Huff-Cook Burial association was a similar set up. There were numerous burial associations back in the 1960's and 1970's with similar set ups.
People who claim they can lock your price in on something today that you will need decades later are either pulling a fast one OR have zero understanding of basic economics. Unless they take the money at today's cost and invest it in a way to keep up with inflation. It is my understanding that Senior Life's merchandise provider company does not recieve any money (beyond the few dollars per month possibly )until the death occurs.
This is just me making assumptions. I have no insider knowledge of Senior Life or their plan. But I've seen it play out a few times.
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Newby & theinsuranceman & rouse, thank you for responding to my question in detail. I appreciate it.
theinsuranceman: since you work with SL, you're probably the best person to answer this question.
If Legacy Assurance filed for bankruptcy, would the clients lose the "locked in casket price"?
Or is there something in writing in the policy that states that Senior Life will 100% guarantee the clients get the "locked in casket price of 3500" whether Legacy Assurance goes out of business or not?
theinsuranceman: since you work with SL, you're probably the best person to answer this question.
If Legacy Assurance filed for bankruptcy, would the clients lose the "locked in casket price"?
Or is there something in writing in the policy that states that Senior Life will 100% guarantee the clients get the "locked in casket price of 3500" whether Legacy Assurance goes out of business or not?
Let me tell you about the Legacy Assurance ..... plan...... I get a dozen calls a day because they do not list their phone number with the 800 directory..... Yes, my agency is Legacy Assurance Group and not the Senior Life plan.....
These people are constantly complaining of the fact that they cancelled their insurance and Legacy Assurance (from Senior Life) still bills them the $3/mo.
I get calls from the banks and the clients that are trying to figure it out..... I tell you one thing, my lawyers are loving it..... You can make the inference.
Skipper
These people are constantly complaining of the fact that they cancelled their insurance and Legacy Assurance (from Senior Life) still bills them the $3/mo.
I get calls from the banks and the clients that are trying to figure it out..... I tell you one thing, my lawyers are loving it..... You can make the inference.
Skipper
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