Policies Are in Trouble - Need Help.

[scagnt83]

I don't consider myself an "FE" agent. My average issue age for 2014 was 47.

You constantly recommend FE policies here on the forum. And the majority of your posts seem to be in the FE section. So you have always seemed like an FE agent.

Hopefully you are not selling FE to those 47 year olds.

(FE refers to a product, not a demographic)

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I
Yea....but they do. Either by choice or by some sales manager telling them to. So did I when I first started. It took me about 3 years to realize what the potential danger they were for people 20 to 30 years down the road. You see, I actually care about the people I meet. They are not simply pawns for my own personal gain. This is the greatest job for people that not only want to make a living but to really help people at the same time.

You care, but you scaremonger them into buying new policies at a higher COI with complete disregard to the numbers behind it all.....

If that is you caring I would hate to see you not care.

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I don't care what the lapse rate is. What happens after an agent makes the sale is not relevant to the elements of the product and how it can be safe or not safe at the point of sale. If it makes you happy to win the lapse rate issue, then good, it's yours.

What happens to a policy after the sale is irrelevant?? I dont think most clients feel that way.

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I have to hand it to you. I never thought you would take a natural assumption and use that to prove all ULs are guaranteed. The 'natural assumption' is that all ULs are guaranteed if you dump enough money into them. I would classify that as a "no chit, Sherlock" moment.

The other thread even has tons of documentation to support my argument. All you have produced is a self made illustration which only shows it to be safe due to the high premium.

I dont know what you mean by "natural assumption". I know what "current assumption" is... but I was not referring to the Current Assumption portion of the illustration. I was referring to the contractually guaranteed portion of the illustration.

And I knew that when presented with evidence you would just dismiss it.... very professional...


Any UL can be contractually guaranteed if funded correctly. I said that is a fact. You asked me to prove it. I showed you an illustration to prove it.

And all illustrations are "self made". I used the carrier software. And guess what? That illustration is part of the contract!!


If you do not know that the Guaranteed Column of an illustration is contractually guaranteed then you really are ignorant when it comes to life insurance.

Im not going to find a spec policy just to prove one of the most ELEMENTARY concepts of permanent life insurance to you.... the Guaranteed column of an illustration is CONTRACTUALLY GUARANTEED.

And what shows that it is safe is the CONTRACTUALLY GUARANTEED column of the illustration.

The more you argue the more you show your ignorance about permanent life insurance in general.

You say you want to "educate new agents".... yet you do not even understand one of the most basic concepts of the product... you are not only dangerous to clients but you are dangerous to agents too. You did not even understand what it means for a policy to endow or mature.... and that is not even UL specific...

Fact: Any UL can be contractually guaranteed.
Fact: The guaranteed column of a UL is contractually guaranteed
Fact: ULs have only a slightly higher lapse rate than WL, and less than GI/SI (FE)

You have asked for evidence to support these facts and it was given to you. Now you choose to ignore it and dismiss it. It is clear that you care more about winning an argument than being factually correct.

And if you think that $200/m is a "huge amount of money", then you really are an FE agent. I barely would get out of bed to sell a $200/m traditional UL policy. Basically that is the minimum premium I would take on a new client at for traditional or indexed UL.

Also, that premium is what a Par WL would require.... so it is illogical to say the premium is not reasonable. Perhaps for certain demographics it is not. But an 85 year old paying $200/m for $100k-$300k in DB is a steal of a deal. To get the same amount of coverage at that age it would be $700/m at best.


But as I said before, you can speak your ignorance all you want to with other agents. But when you partake in unethical SCAREMONGERING with a consumer and give them UNSUITABLE advice; then Im going to call you out every time.

Your advice was not based on facts, the way you presented it was unethical, and it was dangerous to the consumers financial position.

 

[Moondoggy]

Guys, my head is spinning

I was looking at some of the info I was given and this may help bring things back to the point where I understand things.

Their illustration shows a guaranteed 4% interest rate with maximum charges on the left and their nonguaranteed rate of 4.5% and illustrated charges on the right hand side of the form.

If you look at the right hand non-guaranteed side of the form, my cash value of $32518 continues to increase from age 64 to $47323 at age 83. After age 83 the age jumps to 88 showing a cash value of $35239 then at age 92 the cash value is $2652 and at age 93 the cash value is $394 and after that the policy lapses.

On the left hand guaranteed side my cash value immediately starts decreasing at age 64 to $32042 and by age 76 the cash value is $427 before the policy terminates.

Note that the above illustration is for a 100,000 flexible premium adjustable life insurance policy with a $100 quarterly premium.

What the agent was suggesting is that even though the company is currently paying 4.5% return with the current charges they may not be able to sustain that rate and for illustration purposes they showed me what would happen if the rate would drop to 4.25%. In their 4.25% illustration my cash values rise from $32270 at age 64 to $32719 at age 67 then they start to decrease to $23090 at age 76 and by age 81 to $121 where the policy terminates. Note that this is still the $100,000 policy with a $100 quarterly premium but it was this 4.25% illustration that scared me.

So, what I'm not sure of at this point is how realistic their assumption of the nonguaranteed rate/charges dropping from 4.5% to 4.25% or even to the guaranteed rate of 4.0%. This company is a very old, conservative, Christian-based company and my opinion is that the company would face a very negative backlash from policy holders who vote for the board of directors if they took such a step. That being said, I don't know what the rest of the industry is doing in regard to interest paid on cash values and rates charged.
If the rest of the industry is not holding up the interest rate on their UL policies and impacting their customers in a negative manner than perhaps my insurance provider will follow suit and justify it as an industry trend.

Can anyone give me their best guess as to what the trend is expected to be? If they continue to pay 4.5 percent, there is a much less urgent need to do something than if they drop the rate to 4.25%.

 

[scagnt83]

Guys, my head is spinning

I was looking at some of the info I was given and this may help bring things back to the point where I understand things.

Their illustration shows a guaranteed 4% interest rate with maximum charges on the left and their nonguaranteed rate of 4.5% and illustrated charges on the right hand side of the form.

If you look at the right hand non-guaranteed side of the form, my cash value of $32518 continues to increase from age 64 to $47323 at age 83. After age 83 the age jumps to 88 showing a cash value of $35239 then at age 92 the cash value is $2652 and at age 93 the cash value is $394 and after that the policy lapses.

On the left hand guaranteed side my cash value immediately starts decreasing at age 64 to $32042 and by age 76 the cash value is $427 before the policy terminates.

Note that the above illustration is for a 100,000 flexible premium adjustable life insurance policy with a $100 quarterly premium.

What the agent was suggesting is that even though the company is currently paying 4.5% return with the current charges they may not be able to sustain that rate and for illustration purposes they showed me what would happen if the rate would drop to 4.25%. In their 4.25% illustration my cash values rise from $32270 at age 64 to $32719 at age 67 then they start to decrease to $23090 at age 76 and by age 81 to $121 where the policy terminates. Note that this is still the $100,000 policy with a $100 quarterly premium but it was this 4.25% illustration that scared me.

So, what I'm not sure of at this point is how realistic their assumption of the nonguaranteed rate/charges dropping from 4.5% to 4.25% or even to the guaranteed rate of 4.0%. This company is a very old, conservative, Christian-based company and my opinion is that the company would face a very negative backlash from policy holders who vote for the board of directors if they took such a step. That being said, I don't know what the rest of the industry is doing in regard to interest paid on cash values and rates charged.
If the rest of the industry is not holding up the interest rate on their UL policies and impacting their customers in a negative manner than perhaps my insurance provider will follow suit and justify it as an industry trend.

Can anyone give me their best guess as to what the trend is expected to be? If they continue to pay 4.5 percent, there is a much less urgent need to do something than if they drop the rate to 4.25%.

Sorry to get off track.... but you had been given some extremely bad advice. Sometimes an agents bias or ignorance can be extremely destructive to a clients financial well being.


It is really hard to say if they will drop the interest rate any further. Interest rates in general are at an all time low right now. But contractually they are allowed to take it to the 4% if they wanted to. I have seen very few ULs that are at the absolute lowest rate allowed. But I have seen many that are barely above the min rate. What company is it?


Since you said the non-guaranteed lapses after age 93, either way, right now your policy is not sustainable until age 100 (when you most likely can stop paying premiums and the policy matures (is paid up)).

And a 0.25% drop certainly could be possible.


Here is my take on your situation.... and I have had LOTS of experience with old ULs that are crashing.


1.
Considering your health you will not get anywhere near the amount of death benefit you have now with a new policy. No chance in hell it will happen.

Between the irregular heartbeat and the sleep apnea you would be EXTREMELY lucky to be approved for a fully underwritten policy. Then throw in the build and you really would have trouble being approved.

Your best chance would be what is called a "Simplified Issue" or "Guaranteed Issue" policy. Which are VERY expensive compared to a traditional fully underwritten policy.

At age 64 and with that health you would be looking at $3,600/y+ for $50k in guaranteed coverage.... if you were even approved.
A SI or GI policy would be even more than that for $50k...


2.
So the best option for you is to look at increasing your premium on the UL policies. That will without a doubt provide the most amount of Death Benefit for the dollar.

You want the Guaranteed side of the illustration to at least get to age 85 with the premium you are paying. And you definitely want the non-guaranteed to go to age 100.

Get the agent to run the illustration at 4.25%, and at $250/quarter. I would also look at $200 and see how far that gets you. My guess is that at $250 it will take the guaranteed well into your 80s and the non-guaranteed over age 100.


And this advice is for BOTH policies. There is not a chance in hell that you will get a better deal than what you have now.

The "Cost of Insurance" (how much money it takes to purchase $1k in death benefit) will be double, if not triple what your current policies charge. In other words, you will get double to triple the "bang for your buck" with the current policies vs. a new policy.

If you do not need that much Death Benefit then you can reduce the DB, or do a small combo of both reducing the DB and increasing premium.

Ignore the agents trying to make a sale and ignore the agents with an obvious bias about your product. The right thing to do here is to increase the premiums and keep the current policy.

 

[Jerard]

You constantly recommend FE policies here on the forum. And the majority of your posts seem to be in the FE section. So you have always seemed like an FE agent.

Hopefully you are not selling FE to those 47 year olds.

(FE refers to a product, not a demographic)

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You care, but you scaremonger them into buying new policies at a higher COI with complete disregard to the numbers behind it all.....

If that is you caring I would hate to see you not care.

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What happens to a policy after the sale is irrelevant?? I dont think most clients feel that way.

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I dont know what you mean by "natural assumption". I know what "current assumption" is... but I was not referring to the Current Assumption portion of the illustration. I was referring to the contractually guaranteed portion of the illustration.

And I knew that when presented with evidence you would just dismiss it.... very professional...


Any UL can be contractually guaranteed if funded correctly. I said that is a fact. You asked me to prove it. I showed you an illustration to prove it.

And all illustrations are "self made". I used the carrier software. And guess what? That illustration is part of the contract!!


If you do not know that the Guaranteed Column of an illustration is contractually guaranteed then you really are ignorant when it comes to life insurance.

Im not going to find a spec policy just to prove one of the most ELEMENTARY concepts of permanent life insurance to you.... the Guaranteed column of an illustration is CONTRACTUALLY GUARANTEED.

And what shows that it is safe is the CONTRACTUALLY GUARANTEED column of the illustration.

The more you argue the more you show your ignorance about permanent life insurance in general.

You say you want to "educate new agents".... yet you do not even understand one of the most basic concepts of the product... you are not only dangerous to clients but you are dangerous to agents too. You did not even understand what it means for a policy to endow or mature.... and that is not even UL specific...

Fact: Any UL can be contractually guaranteed.
Fact: The guaranteed column of a UL is contractually guaranteed
Fact: ULs have only a slightly higher lapse rate than WL, and less than GI/SI (FE)

You have asked for evidence to support these facts and it was given to you. Now you choose to ignore it and dismiss it. It is clear that you care more about winning an argument than being factually correct.

And if you think that $200/m is a "huge amount of money", then you really are an FE agent. I barely would get out of bed to sell a $200/m traditional UL policy. Basically that is the minimum premium I would take on a new client at for traditional or indexed UL.

Also, that premium is what a Par WL would require.... so it is illogical to say the premium is not reasonable. Perhaps for certain demographics it is not. But an 85 year old paying $200/m for $100k-$300k in DB is a steal of a deal. To get the same amount of coverage at that age it would be $700/m at best.


But as I said before, you can speak your ignorance all you want to with other agents. But when you partake in unethical SCAREMONGERING with a consumer and give them UNSUITABLE advice; then Im going to call you out every time.

Your advice was not based on facts, the way you presented it was unethical, and it was dangerous to the consumers financial position.

Wow...you've taken a normal forum product disagreement and have made it personal. You have called me "ignorant" several times, have used this disagreement to accuse me of "scaremongering" consumers, called me "unethical" and that I want to cause financial ruin to consumers. What's next, are you going to call me "Hitler" because we disagree?

I'm not going to continue any aspect of this discussion with you. Let's just agree to disagree, as they say. I honestly believe you to be emotionally unstable at this point and I don't want to make it any worse so as to potentially endanger the people around you. So, please, calm down, take a deep breath, and avoid going near small animals.

 

[scagnt83]

Wow...you've taken a normal forum product disagreement and have made it personal. You have called me "ignorant" several times, have used this disagreement to accuse me of "scaremongering" consumers, called me "unethical" and that I want to cause financial ruin to consumers. What's next, are you going to call me "Hitler" because we disagree?

I'm not going to continue any aspect of this discussion with you. Let's just agree to disagree, as they say. I honestly believe you to be emotionally unstable at this point and I don't want to make it any worse so as to potentially endanger the people around you. So, please, calm down, take a deep breath, and avoid going near small animals.

Now who is name calling?


When an agent makes statements that are not true. And those statements could hurt a consumers well being; then yeah, it is personal. I actually care about this industry.

When agents like you give advice about subjects they clearly have no clue about then you are giving the industry a black eye.

You are clearly ignorant about UL, because the questions you asked me were EXTREMELY BASIC questions.

And an agent that does not know what happens when a policy matures is ignorant and needs to do some serious study about life insurance... same with an agent who does not know that the guaranteed column of an illustration is contractually guaranteed


Then throw in the fact that you are telling lies about how UL works, in an effort to get the consumer to drop the UL and take out a new policy. That is basically the very definition of scaremongering... which is an unethical sales practice...


Yes agents like you who give biased and untruthful advice do piss me off. But emotionally unstable? Go back to the FE forum were you belong... you have no business trying to give advice about fully underwritten life insurance.

And as I said before, I will call you out every time I see you make false statements and give unsuitable advice to a consumer.

For the record, I never said you WANTED to cause financial damage... nor do I think you want to... you just have no clue how bad your advice is and that it would cause a financial loss.

 

[Jerard]

Now who is name calling?


When an agent makes statements that are not true. And those statements could hurt a consumers well being; then yeah, it is personal. I actually care about this industry.

When agents like you give advice about subjects they clearly have no clue about then you are giving the industry a black eye.

You are clearly ignorant about UL, because the questions you asked me were EXTREMELY BASIC questions.

And an agent that does not know what happens when a policy matures is ignorant and needs to do some serious study about life insurance... same with an agent who does not know that the guaranteed column of an illustration is contractually guaranteed


Then throw in the fact that you are telling lies about how UL works, in an effort to get the consumer to drop the UL and take out a new policy. That is basically the very definition of scaremongering... which is an unethical sales practice...


Yes agents like you who give biased and untruthful advice do piss me off. But emotionally unstable? Go back to the FE forum were you belong... you have no business trying to give advice about fully underwritten life insurance.

And as I said before, I will call you out every time I see you make false statements and give unsuitable advice to a consumer.

For the record, I never said you WANTED to cause financial damage... nor do I think you want to... you just have no clue how bad your advice is and that it would cause a financial loss.

You had the last word....feel better now?

 

[scagnt83]

You had the last word....feel better now?

Not at all since I know you are out in the field giving that kind of advice to consumers and using those types of sales techniques.

This industry needs a MUCH higher standard for product education.

 

[WinoBlues]

Guys, my head is spinning

I was looking at some of the info I was given and this may help bring things back to the point where I understand things.

Their illustration shows a guaranteed 4% interest rate with maximum charges on the left and their nonguaranteed rate of 4.5% and illustrated charges on the right hand side of the form.

If you look at the right hand non-guaranteed side of the form, my cash value of $32518 continues to increase from age 64 to $47323 at age 83. After age 83 the age jumps to 88 showing a cash value of $35239 then at age 92 the cash value is $2652 and at age 93 the cash value is $394 and after that the policy lapses.

On the left hand guaranteed side my cash value immediately starts decreasing at age 64 to $32042 and by age 76 the cash value is $427 before the policy terminates.

Note that the above illustration is for a 100,000 flexible premium adjustable life insurance policy with a $100 quarterly premium.

What the agent was suggesting is that even though the company is currently paying 4.5% return with the current charges they may not be able to sustain that rate and for illustration purposes they showed me what would happen if the rate would drop to 4.25%. In their 4.25% illustration my cash values rise from $32270 at age 64 to $32719 at age 67 then they start to decrease to $23090 at age 76 and by age 81 to $121 where the policy terminates. Note that this is still the $100,000 policy with a $100 quarterly premium but it was this 4.25% illustration that scared me.

So, what I'm not sure of at this point is how realistic their assumption of the nonguaranteed rate/charges dropping from 4.5% to 4.25% or even to the guaranteed rate of 4.0%. This company is a very old, conservative, Christian-based company and my opinion is that the company would face a very negative backlash from policy holders who vote for the board of directors if they took such a step. That being said, I don't know what the rest of the industry is doing in regard to interest paid on cash values and rates charged.
If the rest of the industry is not holding up the interest rate on their UL policies and impacting their customers in a negative manner than perhaps my insurance provider will follow suit and justify it as an industry trend.

Can anyone give me their best guess as to what the trend is expected to be? If they continue to pay 4.5 percent, there is a much less urgent need to do something than if they drop the rate to 4.25%.

I will add one more option. If you do not want to increase your out go as much and are comfortable with reducing the total amount of insurance. $100,000 example- Have an illustration run showing the cash value from the other policy dumped into this policy and ask the company to do a search for the premium needed to guarantee the policy to age 85 based on guaranteed interest rate. If you want to be a bit more conservative also ask that they do the above at midpoint cost. Lastly do the same based all on guaranteed.

You mentioned that your nephew is an agent with the same company. Have the company assign him as your agent. The other agent's frantic call was BS.

 

[scagnt83]

I will add one more option. If you do not want to increase your out go as much and are comfortable with reducing the total amount of insurance. $100,000 example- Have an illustration run showing the cash value from the other policy dumped into this policy and ask the company to do a search for the premium needed to guarantee the policy to age 85 based on guaranteed interest rate. If you want to be a bit more conservative also ask that they do the above at midpoint cost. Lastly do the same based all on guaranteed.

You mentioned that your nephew is an agent with the same company. Have the company assign him as your agent. The other agent's frantic call was BS.

I would second this as a good option. And I agree that the frantic call was BS. But at the same time you do need to increase your premiums to avoid future trouble.

 

[WinoBlues]

I would second this as a good option. And I agree that the frantic call was BS. But at the same time you do need to increase your premiums to avoid future trouble.

I agree now is a good time to adjust to make it do what he wants it to do. He did not reply if it was increasing db or not. But if it is a 1035 could make that policy sing. A lot of ifs. Without a couple inforces it is all just guesses.

The agent probably had a manager hammering him. Captives.