Penn Mutual Whole Life Contract

[TheLifeGuy]

Would appreciate some insight from those of you with familiarity with this contract.

Will they allow their clients to use the PUA rider with flexibility from year to year to fund the policy? IE can you pay it one year and not pay it again for 7 years and then pay it for 5 in a row. Mass does not. After 1 year of missing payment you must pay it or it comes off permanently.

What is their allowable premium to pua ratio? I know Mass will not allow more than 9X's the premium to be added to the ALIR rider.

Any clarity on the Chronic Illness Rider and differences between the LTC rider on the Mass contract? Mass will not allow you to RPU a contract and receive the benefits of the LTC rider. Also, the LTC monthly benefit is based on the premium portion of the total initial premium, so if you want a blended whole life contract with max cash your LTC monthly benefit is poor. These 2 things leave you with a basic 10 pay policy. My understanding is Penn's rider is based on the death benefit at time of claim.

Finally, our GA suggested that Mass's dividend could take a big fall this year and thus making the Penn blended whole life contract even more attractive.

Thoughts? Thank you in advance.

 

[jboussea]

I know they're more flexible with the PUA than Mass but I have to look it and up and I'll let you know

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check this out if you have $15 to spend

https://gumroad.com/l/guide-to-puas/forum

according to the guide.. Penn mutual has a requirement of $25 every 3 years to keep the rider active ..

in addition to that

50% of the maximum to be paid once every 5 years..

 

[pfg1]

There is no magic product or carrier. Most all the major mutuals have nice par WL with good performance overall. ALL have pros and cons. What I've found is its nice to have access to a couple so that you are covered depending on the situation with your client, and/or the design capabilities you need for a certain case. How they perform long term... there is no way to know and/or actually compare that going into the future. Div rates always vary and always will.

 

[jboussea]

There is no magic product or carrier. Most all the major mutuals have nice par WL with good performance overall. ALL have pros and cons. What I've found is its nice to have access to a couple so that you are covered depending on the situation with your client, and/or the design capabilities you need for a certain case. How they perform long term... there is no way to know and/or actually compare that going into the future. Div rates always vary and always will.

But he's asking about the flexibility of certain products.. Maybe he has a client with a specific date situation that would best suited for a policy that s more flexible with the pua rider

Thelifeguy... I dont think the ratio for penn is as high but the best thing to do is to run some illustration and compare

 

[pfg1]

But he's asking about the flexibility of certain products.. Maybe he has a client with a specific date situation that would best suited for a policy that s more flexible with the pua rider

Thelifeguy... I dont think the ratio for penn is as high but the best thing to do is to run some illustration and compare

Oh I agree, as I mentioned...having a number of carriers is a great idea. Maybe someone that writes alot of Penn can come by and give more specifics to see if its a fit.

 

[scagnt83]

Penn is one of the best WL products on the market. Imo, they are the best for CV along with MM. They allow a higher ratio of PUAs than Mass does (I think it is 10x or 12x base). They also allow lots of flexibility in when to do PUAs.

Penn also offers an Overloan Protection Rider which is unique for a WL policy.


Mass has a great LTCI Rider but they do not allow PUAs along with it. That is because the LTCI Rider uses Dividends to increase the LTC benefit amount. Use the 10 pay with this product and you still get very strong CV performance considering the other benefits. It is also a true LTCI type of benefit and not a Chronic Illness benefit like most ULs have.

 

[TheLifeGuy]

Thank you all for the input.

As it relates to the Chronic Illness Rider what is unique to this compared to the LTC rider Mass has? The language says 2 of 6 daily activities and I'm sure there's a back end expense when you make a claim on the Penn contract but in the event you don't need it then you get a much better IRR than Mass standard contract with LTC rider added. Higher monthly benefit LTC claim and flexibility to the amount of benefit payout under Penn, whereas, the Mass contract you have to add an additional rider to get the monthly benefit to increase but that isn't until age 60 (Year 30 of contract) of illustration I ran. Curious on the differences for claims though.

CV: the CV of the Penn contract is much more attractive than the Mass blended contract apple for apple. This is also based on Mass's current dividend of 7.1%. I guess the operational and mortality expense of Penn is pretty efficient for this to be the case?

PUA: I don't mind the client having to pay $25 and 1 out of 5 years having to fund the PUA at least at 50%. Mass's contract is much less flexible than this.

Again, thank you all for the replies and future ones.

 

[scagnt83]

As it relates to the Chronic Illness Rider what is unique to this compared to the LTC rider Mass has? The language says 2 of 6 daily activities and I'm sure there's a back end expense when you make a claim on the Penn contract but in the event you don't need it then you get a much better IRR than Mass standard contract with LTC rider added. Higher monthly benefit LTC claim and flexibility to the amount of benefit payout under Penn, whereas, the Mass contract you have to add an additional rider to get the monthly benefit to increase but that isn't until age 60 (Year 30 of contract) of illustration I ran. Curious on the differences for claims though.

CV: the CV of the Penn contract is much more attractive than the Mass blended contract apple for apple. This is also based on Mass's current dividend of 7.1%. I guess the operational and mortality expense of Penn is pretty efficient for this to be the case?

PUA: I don't mind the client having to pay $25 and 1 out of 5 years having to fund the PUA at least at 50%. Mass's contract is much less flexible than this.

Again, thank you all for the replies and future ones.

No problem.

I have not taken a real in depth look at Penn's Chronic Illness Rider. Mass actually allocates Dividends to the LTCI benefit amount so it grows over time to a higher monthly benefit to keep up with inflation. It is not the same as most normal Chronic Riders. Id be interested to see your comparison and how they stack up against each other.

You can get more PUAs into the Penn contract generally speaking. So that can help to boost the CV more than others. And yes, the underlying expenses being charged are going to be different, so that effects it too. No way to really tell though if Penn has a lower cost to it than Mass does. You could look at the "per $1000 in DB" charge to get a feel for the underlying costs.. that doesnt really tell the whole story but its about as close as you can get with WL really.

 

[pfg1]

You also have direct vs non-direct recognition, if that is a concern of yours. I know its not a huge issue, but since you are comparing I figured Id mention.

 

[TheLifeGuy]

Scagnt83,

I uploaded the illustrations as attachments for Penn and Mass. $7,000 a year blended premium for 10 years. Max distributions for 10 years from 80-89.

Here is how Penn's CIR reads:
Chronic Illness Accelerated Benefit Rider
Allows you to receive a portion of the policy death benefit if the insured suffers from a chronic illness
Issue Ages: 20-85
(Automatically included with your policy)*
If the insured becomes chronically ill, you can access a portion
of the policy death benefit.
To be eligible for accelerated benefits due to chronic illness, a
US-licensed health care practitioner who is not the policy owner,
insured, beneficiary or a relative thereof, has certified in the last 12
months that:
∆ The insured is unable to perform at least two of the six
activities of daily living — bathing, continence, dressing, eating,
toileting and transferring or;
∆ The insured requires substantial supervision by another to
avoid injury or harm due to severe cognitive impairment.
∆ The insured has had his or her chronic illness for a period of
at least 90 consecutive days.
∆ Continuous care in an eligible facility or at home is expected
to be required for the remainder of the insured’s life when the
insured has a chronic illness.
There is no charge for this protection at issue and no impact on
the policy unless the benefit is used. Exercising this benefit will
reduce your policy death benefit and value, but it can provide
resources your family needs if a chronic illness strikes.

Thanks again everyone for your review!