Review of Waiver of Premium Riders

[L5tc]

What company is UH?

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Sorry you said United Heritage!

 

[WinoBlues]

What company is UH?

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Sorry you said United Heritage!

Yes UH is United Heritage. I used the ONL and UH examples because both called me this week. But my experience with waiver has been good across several companies.

 

[dgoldenz]

Having no DI would be a damn good reason to add a WP Rider... if having and keeping life insurance is a priority, and you have no way to pay those premiums if you are disabled, then not adding it is very illogical. Now when a client has a good DI policy or is in a position where a disability would not impair their ability to pay premiums, then I see it as a waste.

Considering most people don't buy enough life insurance as it is, I still think it's a waste. If someone wants to buy it I'm not going to tell them no, but unless the WP rider is a very low percentage of the premium, not worth it IMO.

 

[scagnt83]

Considering most people don't buy enough life insurance as it is, I still think it's a waste. If someone wants to buy it I'm not going to tell them no, but unless the WP rider is a very low percentage of the premium, not worth it IMO.

If they cant afford enough while working they will be able to afford none if Disabled...

If they have a good DI policy in place or sufficent assets then I dont worry about it. But if it is a young family who does not have either then I see it as a good thing. Most of my clients are 50+ and have a decent amount of assets, so I dont include it as much as I would if I worked a younger demographic.

 

[WinoBlues]

I called and left a message for the claims rep that handles one of my ONL clients that is on WP. She has been on waiver for several years. She has Marfans Syndrome, She worked as a proof reader for the power Rangers animation, I believe. She can do all her ADLs, drives, runs her household etc.. My call was to ask what happens at the end of the level period of the term. The CS rep said the rider ends at 65. I questioned if he was not talking about the normal age when the rider comes off versus when the claim would stop. He and the superviser were guessing. I am hoping that the waiver waives all premiums till she goes back to work or dies.

Here is an example of another company, United Heritage.

In 2000 I wrote a 54 yr old male a $100,000.00 20 yr level term with WP. Of the $59mo $13. was for the WP. I already had a WL on him. About 2006 he hurt his back and could no longer work at the dairy where he worked. He went on waiver. In 2010 UH contacted me to let me know that the term conversion option was about to end and he needed to convert. We converted it to a Non Par WL still under waiver. He is now 70 has a $100,000.00 policy under waiver with abot $8,000 in CV. He cashed in the small WL policy and took about $20,000 CV. Oh, and I made over $5,000 on the conversion.

I have another client that was a SR Cadilac Tech at one of the larger dealerships. Now blind due to diabetes. He has been on waiver about ten years he is about age 59 now. All cost on his $300,000.00 UL along with the $150,000.00 spouse rider are waived. I think he has pulled out something like $50,000.00 of cash values. Cash Values are back up to $18,000. Obviously he is much more dependent on his wife and her daycare business so we wrote her a large policy with WP.

I am a believer.

Edit: I should add I have many more clients that have never use the WP rider than have used it.

The ONL claims rep returned my call. On my term client they will convert the policy 30 days prior to the end of the conversion option ending. They will convert it to a whole life policy and continue waiving premiums. That is pretty solid in my book.

 

[L5tc]

And they pay commission on the conversion correct?

If so this is certainly a "I shoulda had a V8 moment!"

 

[WinoBlues]

And they pay commission on the conversion correct?

If so this is certainly a "I shoulda had a V8 moment!"

That I do not know. UH did on a couple. But I understand they do not now. I will test it when the time comes though.

However, happy clients tend to buy more and refer us. the ONL client had called me this week to buy a couple larger term policies for her adult kids. With WP of course.

 

[L5tc]

Even they don't pay commission, if I had put that WP in place and it took care of the client I'm a very happy agent.

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Here's an WP from AXA. It's an old UL contract and it might be different now. However fwiw this is a new illustration. I'll summarize because I'm lazy; "totally and continuously disabled for 6 months." They will pay until age 65. Now... I guess they get to define "totally."

 

[WinoBlues]

Right now I am experiencing first hand what it is like to max your deductible, co-insurance and hit your stop loss on health insurance. Have both OHE and Individual DI kick in and look at having waiver of premium begin on my life insurance policies. I am currently in a wheelchair, cannot drive, cannot walk, cannot climb stairs, can't bathe without assistance, can't visit clients or attempt to gain new ones.

But, when NYL asked me in writing in determining if I meet the definition of disability for my life policies, the realization that they will honor that rider can down to a crashing halt. Can you do "any occupation?" was the question.

Well I can type and I can talk on the phone, so in today's world according to those words in that question, I am able bodied. So what short of dead, will answer that question in today's modern world?

There has quickly become the realization that all those years where I have sold waiver of premium on life policies has been a farce. Steven Hawking does not meet this definition of disability on these life policies. And I am not talking about el cheapo fly by night insurance company, I am talking about one of the cornerstones of the industry.

I sold a useless rider for these last 26 years. Am I just mad? yes. Mad that I was fooled into believing how important wavier of premium was for a policyholder.

Well, as time advances and technology improves hitting the definition of "any occupation" makes this a useless rider.

And no, it was not "any occupation based on education, blah blah blah. It was "any occupation" followed by a question mark.

Both my DI policies have come through, both consider me totally disabled right now. I hope to get better and am working hard on it, but I thought I would share this with other agents and maybe they can review what adding that rider actually does for a policy holder?

Maybe ask your carriers for some examples of when they would activate the rider?

Food for thought. Been thinking about this for a while. I put these on my own policies because I was taught how important that was. Well, real life happens and time has really made that rider obsolete except in the most dire cases.

Hey Larry,

Any word on the WP claim yet?

Side note: I am a barefoot most of the summer kinda guy. Your story has me slipping on boat shoes now.

 

[LGilmore]

No word yet, but I have been out of town the last 10 days. In a couple days I get fitted for a new foot, and the next "step" in the process continues. I hope to be walking without assistance by August. I did this initially on 7/31/14.

The progress has been good. Adding a little weight to the foot every few days. My size (6'7" 290lbs) has had the surgeon be extra careful in the process. That's a lotta weight to bear down on a size 5 foot. Dropped about 30 lbs since the amputation as well.

By all means be careful with your feet. Sorta like when I was a young man, I would hit the ground and bounce back up without any difficulty. Now I hit and stick for a while as I sort out what hurts...

Cheers guys. Back in the saddle soon.