30 Yr Term Prem Raise at 15 Yrs

[HoosierLife]

I have a friend who has a 30 yr term with shelter. He says they told him they could raise his premiums after 15 yrs. They would have to raise everyone's premiums is what they told him. Does anybody know anything about this?

 

[STIBROKER]

There are plans that pass themselves as 30 year term but prem. is only locked at 15....

 

[Mattschmidt]

30 year term period with guaranteed premiums of 15 years...Not really a good deal for the consumer...You might want to visit with them, and see if you can't get them a traditional 30 year term with guaranteed premiums

 

[HoosierLife]

30 year term period with guaranteed premiums of 15 years...Not really a good deal for the consumer...You might want to visit with them, and see if you can't get them a traditional 30 year term with guaranteed premiums

Well that was the plan. But I would like it to sound like I know what I'm talking about. What causes the prem to jump? Anything else that will make me look smart?

 

[WinoBlues]

Well that was the plan. But I would like it to sound like I know what I'm talking about. What causes the prem to jump? Anything else that will make me look smart?

They can raise it pretty much for any reason. Also, they can raise it every year if they choose. Best to read over the policy with him. Show it to him in his policy.

 

[Mattschmidt]

Well that was the plan. But I would like it to sound like I know what I'm talking about. What causes the prem to jump? Anything else that will make me look smart?

Some P&C companies, and Primerica have these types of policies..Often times, it's not in the clients best interest...Do what Wino Blues suggested, review their policies with them... Then show then an alternative, and you will look like a hero!

 

[xrac]

Insurance companies make more money with these policies. When they raise rates, older and therefore the greater risk policies are more likely to lapse.

 

[Norwayguy]

They can raise it pretty much for any reason. Also, they can raise it every year if they choose. Best to read over the policy with him. Show it to him in his policy.

X2 open the policy and it will have the contractual guaranteed rates for years 16 through 30. They may not raise the rates but that is the clients guaranteed worst case. Then show them what they qualify for with the rates guaranteed.
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Some P&C companies, and Primerica have these types of policies..Often times, it's not in the clients best interest...Do what Wino Blues suggested, review their policies with them... Then show then an alternative, and you will look like a hero!

Actually many more carriers offer these same things. Americo, Mutual of Omaha and others offer the option of a shorter guarantee period, I have really never understood the reason for selling a 30 year term with only 15 years guaranteed it isn't for insurability because the 15 year plan is guaranteed renewable the only reason is for an agent who can't close trying to sell on a lower price hoping the client doesn't notice.

 

[rousemark]

When AGLA first introduced their FLEX Term, it could be sold for terms of 10 - 35 years but the initial premium was only guaranteed for 5 years. (They have now changed it to guarantee for the entire term period) The premium may or may not have been raised any time following the expiration of the 5 years but it could not exceed the contractual guarantee. This supposedly gave the company a little wiggle room if their pricing assumptions, mortality, investment return, etc were not met. One effect was to make it a tougher sell in a competitive situation so that might have been the reason they changed it.

 

[F350]

kinda simple, if the client NOW has health issues where they are un-insurable, and cant replace the policy, the Insurance company just made a bunch of extra money as the client has no choice but to keep the policy.