Whole Life... Why Not to Love It?

[BNTRS]

So you're saying that BNTRS was not comparing "apples to apples".

You're saying that an 8.78% average declared dividend rate does NOT mean that my policy cash value has grown by 8.78% (but by some lower amount?).

You're saying that an 8.78% average declared dividend rate is not the same as an 8.78% capital appreciation.

Which one grows my bottom line more: 8.78% average declared dividend rate or an 8.78% capital appreciation (and we'll forget about my 2% to 5% stock dividend payments for now)?

Wait a minute. You drag this on claiming you know better than us, and suggesting we're buffoons incapable of refuting your highly sophisticated claims and then when presented with the math you so desperately sought you whine and declare it bulls--t? And then you show us that you clearly do not understand the most basic principle of participating whole life insurance?

So as I suspected, you're overzealous assault on whole life insurance stems from your vast ignorance.

A dividend rate represents the yield in a given year of a whole life policy's reserve (cash value for all intents and purposes).

Even though the data is public and widely available, I'll do your work for you and post the numbers when I'm on the computer I used to look at it. For now please note that there is no need to send PM's to me with obscenities.

 

[houcoogster]

I think I've just learned something reading this thread. I've always wondered how people sold this stuff and now I think I know. You confuse the heck out people with all the terms, formulas and acronyms.
After 30 minutes of this I would just say ok ok where do I sign?

 

[Mr_Ed]

I think I've just learned something reading this thread. I've always wondered how people sold this stuff and now I think I know. You confuse the heck out people with all the terms, formulas and acronyms.
After 30 minutes of this I would just say ok ok where do I sign?

BINGO.



Worse than buying a car.

 

[houcoogster]

BINGO.



Worse than buying a car.

It is.

The Govt. should contract you guys to extract information from suspected terrorists. Waterboarding ain't got nothing on you guys.

 

[DHK]

How dividends work (and how most agents don't quite understand them):

http://www.insurance-forums.net/for...ian-announces-dividend-t36465.html#post634207
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I think I've just learned something reading this thread. I've always wondered how people sold this stuff and now I think I know. You confuse the heck out people with all the terms, formulas and acronyms.
After 30 minutes of this I would just say ok ok where do I sign?

That's because clients don't ask these questions. Agents do. Or rather people who are looking for someone else to 'prove' that they're right.

This has been fun, but some people want others to do all the work for them. I already suggested using the 'search' function because nearly everything is on these forums. Just look at my past posts, Larry's posts and others.

But if you don't get it, it's okay. Leave the permanent cases to us. We'll take good care of them!

 

[scagnt83]

I think I've just learned something reading this thread. I've always wondered how people sold this stuff and now I think I know. You confuse the heck out people with all the terms, formulas and acronyms.
After 30 minutes of this I would just say ok ok where do I sign?

Thats not how to sell overfunded WL.

-The concept of explaining/selling overfunded WL is pretty simple.

1- You show the person an illustration.

2- Show them the "Guaranteed" column, tell them that is the worst case scenario.

3- Show them the "Current" Column, tell them that is if the company keeps performing at the same rate they are today.

4- Show them the "Midpoint" Column, tell them that is in-between the worst case scenario and current performance.

5- Explain that the Cash Value grows tax-deferred & can be accessed tax-free through internal policy loans.
The loans are paid for internally within the workings of the policy. The policy offers the loan feature because the IRS does not tax loans. This is how you get tax-free distributions.

6- Explain that it is a long term commitment that needs a minimum of 10 years of funding.

7- Ask if a tax advantaged conservative savings vehicle such as this would be of interest to them.

That is the secret.

Believe it or not there are lots of people who jump all over a tax-free guaranteed 2% return (thats irr not dividend rate), with the likelihood of a 3%-5% return (again irr).

Internal Rate of Return is as complicated as the discussion needs to be.

 

[DHK]

Which one grows my bottom line more: 8.78% average declared dividend rate or an 8.78% capital appreciation (and we'll forget about my 2% to 5% stock dividend payments for now)?

Until you've read a life insurance illustration, you won't get it anyways.

Obviously, an 8.78% capital appreciation would be higher for the individual policy than the 8.78% declared dividend.

Basically, read my link that I posted above. Remember that each policy is structured differently, so each policy will receive a different dividend treatment.

Policies on the books for 20 years will get a bigger dividend than a policy that's 5 years old.

Polices that are ultra-superman-preferred will get a better dividend than a standard underwriting (primarily for the lower premium).

Policies that are rated with high premiums for the death benefit risk will get a better dividend than standard (go figure!).

Each company has their own dividend distribution model. The key is helping the policy max out its opportunity for maximum eligibility for the largest dividend.

Unless you're a well-trained life insurance agent who understands their company's products... you won't know how to do any of the above, let alone explain it to prospects in simple terms that they can understand.

Just leave it to the professionals. We'll be happy to convert your client's term to a permanent plan.

 

[houcoogster]

But if you don't get it, it's okay. Leave the permanent cases to us. We'll take good care of them!

Easy there tiger, you guys can't seem to agree on exactly how to "take care of anything". This is not my niche but if one falls in my lap I can go through Pinny or somebody ect. Don't get the false idea that you are intellectually superior.

 

[DHK]

Easy there tiger, you guys can't seem to agree on exactly how to "take care of anything". This is not my niche but if one falls in my lap I can go through Pinny or somebody ect. Don't get the false idea that you are intellectually superior.

Pot calling the kettle black?

Permanent life insurance is like a swiss army knife. Many tools that can do many things. But if you don't know how to use it, it's worthless.

We can agree that life insurance is a great tool. Exactly how each agent likes to use it... is up to each of us with the specific nature and objectives of the client.

 

[Mr_Ed]

Pot calling the kettle black?

Permanent life insurance is like a swiss army knife. Many tools that can do many things. But if you don't know how to use it, it's worthless.

We can agree that life insurance is a great tool. Exactly how each agent likes to use it... is up to each of us with the specific nature and objectives of the client.

...just please don't tell a 25 year old to put $500 per month in a WL par policy when he still has high interest credit card debt and has not yet opened up an IRA!!!!