NYLife Vs Prudential???

[Advisor06]

Hey guys...I am trying to figure out what company would be best for a long term future. I have been in the industry with a captive fraternal company for the last 9 years and recently went independent and working a 9-5 job which boy was not the greener grass. I realized that the "job" was not a grass is greener on the other side and lost all my freedom I have had for many years and took a step back financially to have a consistant income. I need to go with a larger company that will offer health insurance for my family and based on two friends that are trying to get me to go with their company but I am unsure. Obviously one is at NY Life and the other is looking to go with Pru as a sales manager and wants me to work under him.

Both seem to have pro's but I'm unsure of the cons and do want to put in a year or two and have to leave. Really looking for a company where I can actually have some longevity and the ability to make money.

 

[DHK]

I'm fond of Prudential's variable annuities (do they still have that daily 'lock-in'?). Of course, that would require securities registration (series 6 & 63).

Pru also has a fixed indexed universal life policy. It may not be the most competitive, but at least they have it.

I know NYL doesn't have nor allow you to sell any indexed products and I'm not as familiar with their variable annuities and available riders.

Prudential will also let you get P&C licensed and sell Liberty Mutual to your clients. Not exactly sure how I would feel about that, but as long as there's no P&C quotas to hit, I guess it could be nice. Unless they decline a claim and the client decides to move their entire relationship away from you.

Any office costs - cubicle, internet, phone, etc?

Do you start with health insurance on day one? I know I did at my old MassMutual agency.

Ask about marketing budgets, office reimbursements, non-qualified deferred comp, and other parts that are inherent in a captive agent compensation agreement.

Of course, there's training considerations. Especially if your old products aren't geared for the same kind of markets that your new product line is geared for.

Any initial sales targets to be aware of? They should be easy enough to hit, but you just need to be aware of them.

Basically, you don't want to have ANY surprises... so make sure you interview THEM more than they interview you.

 

[Bwell86]

I don't know about NYL, but I'm a Pru guy. I'm going on 5 years.

My training with them was great, but it sounds like you've got some experience all ready.

My biggest pro is the VA products with Pru are great, but we can also write Axa, SunAmerica, and Jackson National. This makes it so you're able to give clients options.

Our Sponsored Outbrokerage is nice. We go through Crump for anything non Pru. I've read some negative things about working with Crump on these boards, but I've never had any issues. I also don't have anything to compare it to.

All non Pru products still flow through your Pru comp grid which means it still goes toward your benefits and bonuses.

I work out of an agency office. I lived the cubicle life for a few years while it was free. They steady increase what you're paying for. By the end of year two, your cube is still free, but you pay $100 every two weeks for "agency support." This includes printing, utilities, Internet, phone, etc.

By year four, you also have to rent your cubicle. I think it's $500 a month just for the cube. I opted to rent out an actual office inside the office. I pay a total of $450 a month with my agency support fee. I think it's ridiculous that my office is way cheaper than a cubicle.

As mentioned, Liberty Mutual is our only P&C company. I am not licensed so I've never dealt with it. I've seen guys try, but they don't seem to last.

Compliance is very tight with Pru. I'm told this is a good thing, but we do butt heads occasionally. Especially when it comes to how we can advertise.

Let me know if you have any questions.

 

[walthamny]

NYL has better training for someone starting new but that would not be important for you. Prudential has better variable annuities and NYL does not allow index UL or index annuities. I have met more NYL agents who have been with the company 20plus years than Prudential agents, but I was a NYL agent for 9 years so obviously biased. For some NYL gives structure, lower commission payout in exchange for group health insurance and pension. In almost cases if you are getting health insurance subsidized, you are getting lower commissions on your life business. I would not go back to being captive because of health insurance, I don't think the math adds up. You can make Ohio National your life carrier and they will subsidize it once you are level 6 with them. And they won't stop you from anything else you do.

NYL or Prudential offer a lot of other agents company and that is sometimes important. I had races with other NYL agents on how many appointments we could make every monday evening. I find that hard to repeat in the independent world. By the way, both prudential and NYL, if you get one complaint and the company wants to get rid off you, they can. I have seen agents from both companies canned after 20 years.

 

[ferrari550]

Pru has better compensation.

 

[ktri14]

I know NYL doesn't have nor allow you to sell any indexed products and I'm not as familiar with their variable annuities and available riders.

Not only is this true, but if NYL even finds out that you wrote an IUL policy for a client, under a different carrier, they will terminate your contract. This is due to the "smoke & mirrors" that has been involved in IUL policies.

Many agents push them because the commissions are huge.

Bring on the backlash.

 

[Robert Barney]

Why do so many agents want to sell themselves into indentured servitude? For the promise of security? It's a false promise.

 

[DHK]

Not only is this true, but if NYL even finds out that you wrote an IUL policy for a client, under a different carrier, they will terminate your contract. This is due to the "smoke & mirrors" that has been involved in IUL policies.

Many agents push them because the commissions are huge.

Bring on the backlash.

There's more of that Mother Mutual brainwashing again.

How many IUL illustrations have you done?

Can you properly explain IUL?

Let's go with a NYL approved policy structure... can you explain VUL?

Have you done any VUL policy illustrations?

Do you know the difference between IUL and VUL and which one has less investment risk associated with it?

The commissions between an IUL and a VUL... is about the same, except that a VUL usually has a broker/dealer haircut, which has nothing to do with the policy itself.

 

[scagnt83]

Many agents push them because the commissions are huge.

For the quality IUL carriers the comp is not any larger than selling an overfunded WL.

IUL target premium is usually much less than a WL base premium. (usually target for an overfunded policy is 20%-40% of total premiums)
But since the comp is usually higher it basically nets out to about the same as 55% comp on a WL.

Then just like WL, you get paid 2%-5% on Excess Premium above Target.


The reason for IUL is not smoke and mirrors. UL in general is a more efficient type of policy because of the ability to use GPT Testing within the policy. It allows the DB to stay lower vs. using CVAT (like WL does) which in turn allows for higher CV and a higher income to be withdrawn.

IUL also offers OverLoan protection riders. If you are selling life insurance for CV this is a HUGE safety net to have. If your client loans out a bunch of money and then lapses a policy in old age it could create a tax bomb in the tens of thousands of dollars.
The only WL on the market that I know of that offers overloan protection is Penn.


As someone who used to work for your main competitor, I can attest that these are the types of things the mutuals do not teach you about life insurance. To put it plainly, you dont know what you dont know because what you know is what they want you to know.

 

[ktri14]

Okay, I knocked out a few push-ups, sharpened my arrows, and am now prepared for battle. Don't expect anything else out of me, tonight. It's wife and kiddo night. I know you're on here too, DHK. Let's get to it.

For the quality IUL carriers the comp is not any larger than selling an overfunded WL.

IUL target premium is usually much less than a WL base premium. (usually target for an overfunded policy is 20%-40% of total premiums)
But since the comp is usually higher it basically nets out to about the same as 55% comp on a WL.

For the preceding: Wrong. Comp varies largely depending on your contract, amount/quality of business that you do with the carrier, the carrier itself, as well as the IUL commission bonus programs that we've seen carriers run on a quasi-regular basis (e.g. 'sell 'x' CTP in 'y' product by this time, get x% more comp).

The reason for IUL is not smoke and mirrors. UL in general is a more efficient type of policy because of the ability to use GPT Testing within the policy. It allows the DB to stay lower vs. using CVAT (like WL does) which in turn allows for higher CV and a higher income to be withdrawn.

This statement doesn't seem to make sense. Not sure what the first sentence has to do with the rest of the statement, but here goes...UL, in general, will provide for a greater initial DB yield, over a comparable WL policy. Comparing the structures are apples to oranges (or in the case of IUL, rotten tomatoes). One might think you're referring to the ability to leverage a higher DB per premium dollar, but you're obviously talking cash value.

Let's talk about efficiency. Efficiency is relative, depending on the goal. In whole life, you essentially lock in your COI. In UL-based contracts, your COI increases every single year. Many IUL peddlers run increasing DB while overfunding. As such, net amount at risk remains a constant (or in the case of a 0% crediting yield, may increase). Couple a static/increasing net amount at risk with annually increasing COIs, and I cannot see where the IUL is a more "efficient" accumulation vehicle.

This of course, is in addition to the unrealistic rates of return peddled by IUL proponents that are the only way to make the policy look good on paper. And how about those COIs and other charges that can be manipulated? If I'm not mistaken, WL policies have guaranteed cash value growth and guaranteed charges. Look at the 'guaranteed' column on an IUL. Short of attaching a secondary NLG, the policies all die within 20 - 25 years max.

IUL also offers OverLoan protection riders. If you are selling life insurance for CV this is a HUGE safety net to have. If your client loans out a bunch of money and then lapses a policy in old age it could create a tax bomb in the tens of thousands of dollars.

The only WL on the market that I know of that offers overloan protection is Penn.

Congratulations. OLP riders are common on almost every UL-based product and are necessary, due to the volatility/sheer number of variables present in this type of contract.

On OLP: 1) OLP is not guaranteed. It's designed to help avert a potential collapse of the policy/tax bill. If you've ever read the contract language used to describe OLP, you would be less cavalier in your approach to the topic.

2) On loaning out 'a bunch of money' - IUL illustrations typically show loans from day 1, never withdrawal, then loans. Why? They also tout a (typically) 200 - 300bps loan arbitrage based on a variable loan rate (e.g. 4.5% and a crediting rate of 7%).

Firstly, that'll be illegal as of 3/1/16. Secondly, they fail to point out what happens to your policy when you have a 0% crediting year and an enormous loan out at even 4.5%. Between the potential increase in net amount at risk, increasing COIs, and 4.5% negative arbitrage on loan vs crediting rate, I can see why you cling for dear life to the OLP rider.

Whole life is not exposed to nearly as many variables.

As someone who used to work for your main competitor, I can attest that these are the types of things the mutuals do not teach you about life insurance. To put it plainly, you dont know what you dont know because what you know is what they want you to know.

As someone who probably got fired from our main competitor, perhaps for having no understanding of life insurance whatsoever and/or making proper recommendations.

Your next statement, assuming that I'm "brain-washed" and pursued no knowledge outside what was spoon-fed to me during training. That, in and of itself, sounds like the same "throw-up" that shoots its way out of DHK's hole. When logic and fact are applied to your statements, the arguments fall apart.