I everyone, as a relatively new agent who is also a numbers guy, I'm really curious to see some real in force policies that were implemented over 30 years ago. I'm putting together some comparisons vs a term and invest the difference model. Ideally it would be great if I could get the initial illustration, along with inforce illustration today. Anyone have any ideas how I might get this?
Looking for Old in Force WL Policies on which to Do Some Analysis
- Thread starter aureo11
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I saw a .pdf that Mass Mutual out out some time ago that showed their actual performance/cash value results from policies issues decades ago. You might contact a local Mass GA for it, although I assume you would have to be appointed to get your hands on it.
- 4,132
What whole life do you sell currently?
- 24,967
See the people. Go write some business. You will find many old policies in people's files.
If you are thinking of comparing whole life to investment, you would better spend your time going out there seeing people.
My suggestion is to learn the concept and different products, wl, ul, vul, iul, and term. Figure out what is more applicable to your clients' situation. Every product has their strength and their shortcomings. What you think is good may not be what your clients desire.
Besides, past performance does not guarantee future result. Figure out how each of those products work at a granular level (you did say you are a numbers guy), and do your best for your clients.
I read an article about consumers will have another episode of broken promises waiting in future with their iul policies. It started with wl with too high projected div rate, them vul with over promised performances.
The problem is not the products. It was how they were sold by agents projecting false expectations.
Arm yourself with knowledge and do a good job. You will set yourself apart.
My suggestion is to learn the concept and different products, wl, ul, vul, iul, and term. Figure out what is more applicable to your clients' situation. Every product has their strength and their shortcomings. What you think is good may not be what your clients desire.
Besides, past performance does not guarantee future result. Figure out how each of those products work at a granular level (you did say you are a numbers guy), and do your best for your clients.
I read an article about consumers will have another episode of broken promises waiting in future with their iul policies. It started with wl with too high projected div rate, them vul with over promised performances.
The problem is not the products. It was how they were sold by agents projecting false expectations.
Arm yourself with knowledge and do a good job. You will set yourself apart.
- 188
What RayUK says is spot on. Go learn the different policies.
For WL I sell Mass, Guaridan, Ohio National, Penn Mutual, Minnesota
For WL I sell Mass, Guaridan, Ohio National, Penn Mutual, Minnesota
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LGilmore said:
I'm currently contracted with Mass, penn, Ohio and Lafayette. I'm really hoping to find a couple policies which were overfunded.
I strongly agree that IUL policies will likely underperform over the next 10 years. But my main interest is to see how much lower than expected a well designed/funded WL policy did over the past 30 years. On white coat investor (who hates permanent insurance) he posted an article about a guy that started in 1983 with what seems to have been a basic policy, and has still gotten about 7% IRR on his policy. Of course WCI tore it down because it was projected at 8%. Based on what interest rates have done over 30 years, I would say that spread is quite small and extremely encouraging. To me it indicates that new customers today are very likely to see much better than expected IRR on the WL policies that put in place today, as interest rates have nowhere to go but up.
- 4,132
I tend to avoid these type of situations anymore because simply you can't fix stupid. Usually the person doing the critical examination applies one condition to the life insurance and something different to the other. They forget the ups and downs and most importantly the RISK differences between products.
And honestly it really isn't a comparison you're looking to promote. People should own BOTH or even more products. You don't put A vs. B, you say you should own A and B and C and even D....
What my whole life does is it allows me to take more risk with my mutual funds because I know if I screw up, my fall back will be that steady eddie whole life with it's cash value.
A whole life is the most boring financial product ever created, and it should be. If you can't get a prospect to understand the idea of different types of risks to take on and mix together, sell them what they want and give it some time.
And honestly it really isn't a comparison you're looking to promote. People should own BOTH or even more products. You don't put A vs. B, you say you should own A and B and C and even D....
What my whole life does is it allows me to take more risk with my mutual funds because I know if I screw up, my fall back will be that steady eddie whole life with it's cash value.
A whole life is the most boring financial product ever created, and it should be. If you can't get a prospect to understand the idea of different types of risks to take on and mix together, sell them what they want and give it some time.
If you are comparing participating wl policies, how it performs depending on two factors. Guaranteed cv + dividend. Guaranteed cv is easy to track enough. You can find the table on the contract. In that case, div is the only variable that would impact future cv, and it is a huge component. When you said interest rate has no where to go but up... While I agree with you, yet we have been telling people that would happen 4 yrs ago and it is still artificially pushed to near zero by the FED. So I do not have a crystal ball on that either.
Let's assume the interest rate goes up, that does not necessarily mean your wl portfolio div rate will go up accordingly. You have to dig a couple layers deeper what makes up the dividend, and that is where the financial str, earning, cash flow, investment team and their philosophies, among other things that make a difference. With the board of the companies looking at their short and long term finances, they determine how much div the policy holders can receive. It is no different than if you own BofA stock and they figure out what div to be. distributed to you annually.
The complexity on knowing how the interest rate will correlate to div rate depends on how the underlying bond portfolio the company is holding in their gen acct. Assuming a company is holding 6% tbond from 20 yrs ago, those holdings will be worth more now than when purchases since current yield is low in comparison. But insurance company will continue to receive cash, hopefully, and they have to continue investing in mostly bond portfolio. When the interest rate rise, it will have inverse effect. The new holdings will have less yield in comparison in the future. That will be one small component of how interest rate may impact div and growth of a wl portfolio.
In short, thinking rising interest rate = rising div is too simple a talk and can be misleading (yet, this was often how it was taught in my captive company to overcome clients rejection.)
That was why I suggested to you to look underneath the hood and learn the in and out of the products if you really want to analyze it.
One thing many may have overlooked is the variable loan interest rate on the back end, for all policies. If the goal is to use the cash value, pay attn to the fine print on the contracts. It is as important on how the portfolio grow.
Just my thoughts. I know this is a long read, but hope it helps.
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Well said LG. Agree 100%
Let's assume the interest rate goes up, that does not necessarily mean your wl portfolio div rate will go up accordingly. You have to dig a couple layers deeper what makes up the dividend, and that is where the financial str, earning, cash flow, investment team and their philosophies, among other things that make a difference. With the board of the companies looking at their short and long term finances, they determine how much div the policy holders can receive. It is no different than if you own BofA stock and they figure out what div to be. distributed to you annually.
The complexity on knowing how the interest rate will correlate to div rate depends on how the underlying bond portfolio the company is holding in their gen acct. Assuming a company is holding 6% tbond from 20 yrs ago, those holdings will be worth more now than when purchases since current yield is low in comparison. But insurance company will continue to receive cash, hopefully, and they have to continue investing in mostly bond portfolio. When the interest rate rise, it will have inverse effect. The new holdings will have less yield in comparison in the future. That will be one small component of how interest rate may impact div and growth of a wl portfolio.
In short, thinking rising interest rate = rising div is too simple a talk and can be misleading (yet, this was often how it was taught in my captive company to overcome clients rejection.)
That was why I suggested to you to look underneath the hood and learn the in and out of the products if you really want to analyze it.
One thing many may have overlooked is the variable loan interest rate on the back end, for all policies. If the goal is to use the cash value, pay attn to the fine print on the contracts. It is as important on how the portfolio grow.
Just my thoughts. I know this is a long read, but hope it helps.
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Well said LG. Agree 100%
