13th Month Premium?

[Franz Kafka]

I have a customer who purchased a term life with an annual premium a year ago and now wants to cancel it. I "thought" I had heard before that commission would be charged back without the 13th month premium. Has anyone ever had to give back the commission because of the missing 13th month premium? This is a first time for me.

 

[theinsuranceman]

I have a customer who purchased a term life with an annual premium a year ago and now wants to cancel it. I "thought" I had heard before that commission would be charged back without the 13th month premium. Has anyone ever had to give back the commission because of the missing 13th month premium? This is a first time for me.

Call the carrier. Very simple.

 

[dgoldenz]

Tell him to pay for one month because you have kids to feed. Or just call the company and find out.

 

[Franz Kafka]

Tell him to pay for one month because you have kids to feed. Or just call the company and find out.

Well, he does have one more kid than I do. I just wanted to see if anyone had an experience with this 13th month thing while I wait for Monday morning.

 

[BNTRS]

Ummm...what would the charge back be? Months that have gone by wouldn't be refunded and a charge back would only be assessed for "un-earned" premium (i.e. premium that will be refunded). At least that's how I've always understood lapses and chargebacks at the companies I've done business with. I've had policies that were paid annually lapsed at the "13th" premium due (second annual premium) and there was no chargeback.

 

[WinoBlues]

You may be confusing Lapse Ratios with Charge Backs. Check with the company. How much is one months premium???

I have a customer who purchased a term life with an annual premium a year ago and now wants to cancel it. I "thought" I had heard before that commission would be charged back without the 13th month premium. Has anyone ever had to give back the commission because of the missing 13th month premium? This is a first time for me.

 

[Franz Kafka]

You may be confusing Lapse Ratios with Charge Backs. Check with the company. How much is one months premium???

I may be but it does make sense since they paid me more than 100%. It's around $100 a month so it would make sense if they would charge back the 13th month premium.

 

[Larry Tew]

Annuities can charge back the commission if it drops within a certain time, and Variable life may have a 6-month chargeback, but regular life (perm or term)? I've never seen a commission chargeback after an entire year of premium has been paid.

 

[Newby]

There are some exceptions to the norm. I would check with the carrier.
For example, with Monumental's Preneed insurance it would charge back 100% of ALL commissions if the policy lapsed in the first 24 months. They pulled that product off the market about a year ago. It wasn't competitive in several ways. But it goes to show you, you can never assume that all companies do things the same way.

 

[Mark]

The avg insurance company has to have the policy on books for 18 months just to break even after paying the agent, the upline and pay for underwriting and homeoffice staff.

With all of my insurance companies, if it falls off the books in 13 months, you dont have to pay back a thing.

I've heard some insurance companies that if it lapses within 24 months, you have to give all your commissions back.

Read the fine print on your contract and never sign a contract that does any crap like that.