Is Commission Paid if Premium is Loaned from Policy ?

[Deepsea]

After the first couple of years of paying a policy, and assuming their is enough cash to pay premium with a policy loan......

Question is, will the agent still get paid a renewal commission, if the premium comes from the policy for that year ?

Thanks

 

[Jerard]

After the first couple of years of paying a policy, and assuming their is enough cash to pay premium with a policy loan......

Question is, will the agent still get paid a renewal commission, if the premium comes from the policy for that year ?

Thanks

You should ask the company for that particular policy. But if that is happening chances are it's a lapse and the client doesn't know it's being paid from loans anyway.

I see two scenarios. One is if the policy is only a couple of years old when it goes on APL then it won't carry it very long so the renewals won't last long either.

Second is if the policy is a few years old, say over 10, then the renewals are reduced to a small percentage anyway.

In either case the renewals are short lived and/or not significant. I wouldn't worry so much about it.

 

[Larry Tew]

After the first couple of years of paying a policy, and assuming their is enough cash to pay premium with a policy loan......

Question is, will the agent still get paid a renewal commission, if the premium comes from the policy for that year ?

Thanks

Yes, renewals are paid. Either the insured executes a policy loan (borrows money from the insurance company using policy cash value as collateral) to pay the premium or he lets the "automatic premium loan" (assuming that's the default non-forfeiture option) kick in to cover the premium.

This is different than if a UL policy owner skips the premium because there is sufficient cash value to cover internal charges. In that case, no renewal would be paid on the UL that skipped paying a premium.

 

[WMG]

After the first couple of years of paying a policy, and assuming their is enough cash to pay premium with a policy loan......

Question is, will the agent still get paid a renewal commission, if the premium comes from the policy for that year ?

Thanks

Absent specifics and facts...in short, simply put...myopically...(get my point? LOL)...Yes, the renewal commission will be paid.