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can anyone tell me a good dividend paying whole life co. and give me some info on paid up policy's?
Dividend Whole Life
- Thread starter rbrewer
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- whole life
Mass Mutual
Guardian
Lafayette Life
Ohio National
American Home LIfe
There are others but I know you can broker with the above.
- 16,908
The companies that XRAC mentioned are all good companies that I guess have participating whole-life policies. Participating policies pay dividends.
But don't confuse a policy that the dividend helps pay the premium with a paid up policy. They are two very different things. People often confuse them and many policies lapse because of it. Dividends are NEVER guaranteed.
A paid up policy is one that was sold as either a single premium, 10-year pay, 20-year pay or paid up at age 65. These policies are actually paid up once you reach the end of the payments and the client will NEVER have to worry about making another payment or the policy lapsing.
A lifetime pay policy will NEVER be paid up until it reaches the endowment age (usually 95 or 100) and even if the dividends made the full payment for the last 10-years that doesn't mean it will make them this year or next year. It's never paid up.
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- #4
- 249
Thanks for the info. I knew about ten pay single pay but I keep hearing people talk about dividend paying and after so many years it can give you a paid up policy if thats what you choose. There's probably know way to estimate just a guess since we don't know for sure about the cash. I have seen 10 and 20 and single but not paid up at 65. Do all the whole life company's offer this and I have been missing it?
- 16,908
You need to correct them when they think a dividend paying the payment is the same as a paid up policy. It is NOT and people thinking that incorrectly is a HUGE mistake.
What happens is; once the dividend has a year that pays the entire premium, the client thinks they have a paid up policy and quits paying anything.
On years where the dividend doesn't make the whole payment, the policy takes an automatic policy loan against the cash value and makes the payment that way.
The client doesn't understand what's happening and still thinks everything is fine and their policy must be paid up. Eventually (usually when they are very old) the cash value runs out and the policy lapses. At that point they have lost their coverage and everything they ever paid in. Then they are MAD at how they think they got screwed.
It is VERY illegal and unethical for an agent to EVER tell someone that their dividends will make their premium payment on any policy. Dividends are NEVER guaranteed with any company. Dividends are unpredictable. They are just a return of excess company profits if any.
I run into a LOT of policies that have lapsed or are about to lapse due to this very reason. And the clients ALWAYS say they have a "paid up" policy.
- 4,132
newby, just throwing a wild guess out here but you sell mostly permanent life, if you sell permanent at all, from stock companies yes?
- 16,908
I sell it all but yes I specialize in single pay and limited pay whole-life. I sell mutuals and stock companies.
I like participating policies the best BUT I make sure that no ever thinks that they have a paid up policy unless they buy a limited payment policy.
G
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How about offering a No Lapse Guarantee UL paid up at age 100 with coverage to age 121. No worries and substantially lower cost! It could also be paid up on a guaranteed basis in 10, 15 or 20 years, for example.
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- #9
- 249
I was with a new client last week and she got a friend on the phone who then got her agent on the phone and he is a Met Life agent and was telling me to sell her a dividend policy that could be paid up later with cash value. I thought you just have to call when you want to stop paying and see what your cash value will get you in paid up? Or can you tell someone pay this amount for 20 yrs for $50,000 coverage than stop paying and you will have lets say a $12,000 life policy. Do you get my questions? Maybe I could call you and speak with you directly? I was not happy with the Met agent.Are they a good co.and how good are their products and commissions if you know? Thanks
That must have been awkward...
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