Penn Mutual Contractual Guarantee on Term Conversions

[jboussea]

Just got an email from Penn saying now all their term products have a contractual guarantee to all their permanent products..

Do you guys know of any other carriers that offer a contractual guarantee on their terms?

 

[VolAgent]

Lots..

Mass Mutual, Ohio National, New York Life, Guardian, Northwestern Mutual and Lincoln Financial Group are some that quickly spring to mind.

In fact, I would say the number of products that do not have a conversion option are vastly outweighed by those that do.

The real question is, what are restrictions are there on converting as far as permanent product choice, length of time to convert, and other eligibility?

 

[jboussea]

Lots..

Mass Mutual, Ohio National, New York Life, Guardian, Northwestern Mutual and Lincoln Financial Group are some that quickly spring to mind.

In fact, I would say the number of products that do not have a conversion option are vastly outweighed by those that do.

The real question is, what are restrictions are there on converting as far as permanent product choice, length of time to convert, and other eligibility?

Are they all a Contractual Guarantee? As in they wont change the conversion options 10 years from now?

The only Restriction with Penn is that you can't convert beyond age 70

 

[VolAgent]

Are they all a Contractual Guarantee? As in they wont change the conversion options 10 years from now?

The only Restriction with Penn is that you can't convert beyond age 70

It would depend on how exactly the convertibility clause is written.

I know the last time I looked all those companies have it written roughly as, "...any permanent product offered by the company at the time of conversion" Ohio National has two term plans, one with full conversion options and one limited to a UL of their choice. Mass Mutual at one time did limit conversion to the first 10 years or the level term period, whichever is shorter. And yes, I believe some do have a maximum age at which you can convert, regardless of length of time otherwise offered for conversion.

I'm not saying its not a big deal. It is great that Penn Mutual is offering this, but they are hardly first by any stretch.

If you are going to sell a term policy, particularly if you want to talk about its convertibility, then you should read exactly how it is written.

I will pick on Cincinnati Life. At one time, and perhaps still, you cannot convert if disabled.

 

[evelyndom7]

Just got an email from Penn saying now all their term products have a contractual guarantee to all their permanent products..

Do you guys know of any other carriers that offer a contractual guarantee on their terms?

Hello my friend
This is Evelyn and for been an Insurance Agent since 1999, I can tell you that the Temporary Insurance doesn't have nothing Guarantee other than the time that the Face Amount is covered for.
Why the Term has economical premium? Because it is rare that the Insurance company has to pay for the Benefit. Mostly people don't die to early, and during this years people are more aware of health care issues. so for this reason people lives longer.
Most of the Temporary Insurance cover up to 30 to 35 years. If a client is 35 years old (time of been more responsible) plus 35 years for the Temp. coverage so this person will be 70 years old when the policy will lapse. Too old to get a new coverage, plus for sure some kind of Illness this person is going to have. So the result will be no more coverage.
Insurance Companies said Got Term and Invest the Difference! Do the people really saved? during 30 to 35 years?
Think about it. ok. This is reality.

 

[jboussea]

It would depend on how exactly the convertibility clause is written.

I know the last time I looked all those companies have it written roughly as, "...any permanent product offered by the company at the time of conversion" Ohio National has two term plans, one with full conversion options and one limited to a UL of their choice. Mass Mutual at one time did limit conversion to the first 10 years or the level term period, whichever is shorter. And yes, I believe some do have a maximum age at which you can convert, regardless of length of time otherwise offered for conversion.

I'm not saying its not a big deal. It is great that Penn Mutual is offering this, but they are hardly first by any stretch.

If you are going to sell a term policy, particularly if you want to talk about its convertibility, then you should read exactly how it is written.

I will pick on Cincinnati Life. At one time, and perhaps still, you cannot convert if disabled.

Thanks Vol .. I would have to compare Penn's old language and compare it to the new.. I've never sole their term because they weren't really competitive... but they do have attractive permanent products to convert to

 

[pfg1]

Good conversion options are definitely a plus - even if the term is not the cheapest on the market. If/when that time comes to convert, the extra few dollars monthly they spent will pale in comparison to having a good product to convert to. Their term, while not the cheapest is certainly competitive.

 

[Justin Bilyj]

Mass' conversion is before 65 years old or 10 policy years which ever is less, but not to be less than the 2nd year. Term conversion credits are for years 2-7. You can convert to any policy type unless you are on the disability rider, then only the whole life 100 is eligible for the converted policy. Conversion doesn't require underwriting unless you are asking for a better risk class, more benefits, or additional riders...

 

[jboussea]

Mass' conversion is before 65 years old or 10 policy years which ever is less, but not to be less than the 2nd year. Term conversion credits are for years 2-7. You can convert to any policy type unless you are on the disability rider, then only the whole life 100 is eligible for the converted policy. Conversion doesn't require underwriting unless you are asking for a better risk class, more benefits, or additional riders...

can they decide later down the line to take away those conversion privileges?

 

[Justin Bilyj]

can they decide later down the line to take away those conversion privileges?

Everything talked about is guaranteed (and in the policy contract) except the conversion credits which is company policy, unless it's for the 20 pay or whole life 100, then the conversion credits are guaranteed also assuming the 20 pay or whole life 100 is still being offered at that time (I don't see Mass not offering those)..