Is It Rebating

[Norwayguy]

So let's say you have a FYC in excess of 100% of premium. You sell a policy and the owner ceases paying the premium. You reach out and they confide they can not afford the premiums so you try your normal policy conservation techniques looking at reducing the face amount etc and the customer for whatever reason does not want to or can afford to make additional premiums. There is no cash value. So why can you not offer to purchase the policy for a small amount of money thereby becoming the policy owner and allowing you to make the premium payments for the rest of the first year so as to say some of your commission and 13 month persistancy.

 

[Josh]

So let's say you have a FYC in excess of 100% of premium. You sell a policy and the owner ceases paying the premium. You reach out and they confide they can not afford the premiums so you try your normal policy conservation techniques looking at reducing the face amount etc and the customer for whatever reason does not want to or can afford to make additional premiums. There is no cash value. So why can you not offer to purchase the policy for a small amount of money thereby becoming the policy owner and allowing you to make the premium payments for the rest of the first year so as to say some of your commission and 13 month persistancy.

Technically I doubt it. If you really did buy it your fine. A rebate is an inducement to buy.

That said, it's a risk I wouldn't take. Even if you weren't doing it, the powers that be might not be as concerned with the specifics.

 

[xrac]

So let's say you have a FYC in excess of 100% of premium. You sell a policy and the owner ceases paying the premium. You reach out and they confide they can not afford the premiums so you try your normal policy conservation techniques looking at reducing the face amount etc and the customer for whatever reason does not want to or can afford to make additional premiums. There is no cash value. So why can you not offer to purchase the policy for a small amount of money thereby becoming the policy owner and allowing you to make the premium payments for the rest of the first year so as to say some of your commission and 13 month persistancy.

Not any different that if a settlement company purchased it as an investment is it?

 

[tlmarketing]

It's not rebating but I think you will find that the contracting of most companies
prohibit you from being the owner, trustee, or beneficiary of your clients policies, and you are not allowed to make premium payments....the exception being for family member policies

 

[Josh]

Not any different that if a settlement company purchased it as an investment is it?

It is different because the settlement company didn't sell it to them.

 

[xrac]

It is different because the settlement company didn't sell it to them.

That is a valid difference.

 

[Newby]

So let's say you have a FYC in excess of 100% of premium. You sell a policy and the owner ceases paying the premium. You reach out and they confide they can not afford the premiums so you try your normal policy conservation techniques looking at reducing the face amount etc and the customer for whatever reason does not want to or can afford to make additional premiums. There is no cash value. So why can you not offer to purchase the policy for a small amount of money thereby becoming the policy owner and allowing you to make the premium payments for the rest of the first year so as to say some of your commission and 13 month persistancy.

I had one that I wanted to buy once. I called the insurance company to ask them if I could. That question did not go over well. They shut me down real quick because they were a key insurance company I didn't want to lose.

 

[Jerard]

I had one that I wanted to buy once. I called the insurance company to ask them if I could. That question did not go over well. They shut me down real quick because they were a key insurance company I didn't want to lose.

They canceled your contract because you asked a question?

 

[Newby]

They canceled your contract because you asked a question?

No but they let me know they would if I purchased the ownership of the lady's policy.

I really was initially motivated by just keeping the lady happy. It was a pre-need funeral policy. She was terminally ill with cancer and mad at the world about it. She had paid in $8,500 in premiums and it was fully paid up. She had $5,800 in cash value and a death benefit of over $12,000 and it was growing at 4% a year.

She had a new husband that wanted her to cash it out and they would travel while she still could. She was absolutely pissed that she had paid in $8,500 and could only get $5,800 if she canceled. She accused me of ripping her off. I was getting no where explaining that she (her Benny) would get $12,000 plus when she died and they don't have to use it for a funeral if she doesn't want to.

Then she came up with the idea...If it's such a good deal, why don't you just take it over and pay me my $8,500?

Hmmmm. I never thought about that before. I'll do that. No problem. Win-win for both of us. So I called the insurance company and they were VERY opposed to the idea. Didn't happen.

 

[Norwayguy]

No but they let me know they would if I purchased the ownership of the lady's policy.

I really was initially motivated by just keeping the lady happy. It was a pre-need funeral policy. She was terminally ill with cancer and mad at the world about it. She had paid in $8,500 in premiums and it was fully paid up. She had $5,800 in cash value and a death benefit of over $12,000 and it was growing at 4% a year.

She had a new husband that wanted her to cash it out and they would travel while she still could. She was absolutely pissed that she had paid in $8,500 and could only get $5,800 if she canceled. She accused me of ripping her off. I was getting no where explaining that she (her Benny) would get $12,000 plus when she died and they don't have to use it for a funeral if she doesn't want to.

Then she came up with the idea...If it's such a good deal, why don't you just take it over and pay me my $8,500?

Hmmmm. I never thought about that before. I'll do that. No problem. Win-win for both of us. So I called the insurance company and they were VERY opposed to the idea. Didn't happen.

Of course the carrier is against the idea as lapses are figured into their mortality costs. I have not done this was just thinking the other day that it is silly to have lapses in the first year of a policy when my commission is in excess of 100% of first year premium so it actually would pay to keep the policy in force till month 14.