I only focus on FE - but i have a lead that is determined to get UL. He is 60 and in perfect health - excellent actually.
He doesn't want Whole Life.
I know squat about UL.
He only wants $30k too . . .
Thanks,
Tom
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The way I understand it - both are permanent insurance. But - my illustration software only goes 20 years on the UL?
Last edited by myinsurebiz : 11-06-2008 at 06:39 PM.
Reason: Automerged Doublepost
Whole life is a fixed-premium permanent contract with premium set to age and health of insured at the time the contract is issued. Univeral Life is more flexible than Whole Life in terms of premium and CSV targets. WL you get what you get with no flex, UL you can flex it to reduce premium or target things like CSV of $1 at age 102, stuff like that.
I like the guaranteed Death benefit Ul's. As long as the client makes the reqd payment they have permanent coverage. Premiums are level. You can even set them up to be paid up at whatever age you choose. About 1/2 the cost of WL. No cash accumulation but I find that most of my clients are mainly concerned with the death benefit and choose to forego the cash accumulation for the lower monthly premium. Genworth will go as low as $25,000. May be a fit for your client. I believe the Genworth product name is LifetimeFlexplus II.
So - UL is good for life as well? Wonder why my software cut it off at 20 years?
CSV?
It gave me the option of 3.65% or 3.0% Guaranteed. With UL - is it best to guarantee the rate or let it fluctuate?
Thanks for your help Dave.
Tom
It's going to depend on the guaranteed rate of the contract. Usually 3% is normal with perm. With WL, you will usually see two columns on an illustration, guaranteed rate cash surrender value and projected rate. It can also be done for UL.
The real difference is with WL, its fixed premium with correspondent CSV (cash surrender value) increasing. With UL products, you can build a much more flexible model, especially if the client is not into having CSV as the basis of the contract. With UL you can target CSV, Death Benefit, Premium Amount and so on...very flexible.
The other way to look at it is that WL (with a good par company paying decent dividends) could create a faster paid-up situation than UL. But, at age 70 that is probably not a primary concern. But you might want to present both options:
1 - UL flexed for lowest premium, correct death benefit and target low to no CSV (you can set it up to have say $1 CSV keeping the policy alive at age 100, stuff like that)
2 - UL as above and WL product paid 20-years to age 90 then paid up (it used to be popular in the 80s to fund that with dividends but that is never a good idea).
Premiums on the WL would be higher than UL in option 2 but that way you give full disclosure and let the client decide. Probably he is going to want highest DB at lowest premium and little or no CSV/
1) Rather than taking the time to learn insurance, it's easier to ask questions here.
Rick
[COLOR=Blue]Well - actually - yes . . .
I never studied it because I didn't see myself selling it. But - the man wants it - so he gets it.
I'll have it figured out by Monday. This forum is what makes learning easy. Any smart guy can get it . . .[/COLOR]
Originally Posted by Dave020
It's going to depend on the guaranteed rate of the contract. Usually 3% is normal with perm. With WL, you will usually see two columns on an illustration, guaranteed rate cash surrender value and projected rate. It can also be done for UL.
The real difference is with WL, its fixed premium with correspondent CSV (cash surrender value) increasing. With UL products, you can build a much more flexible model, especially if the client is not into having CSV as the basis of the contract. With UL you can target CSV, Death Benefit, Premium Amount and so on...very flexible.
The other way to look at it is that WL (with a good par company paying decent dividends) could create a faster paid-up situation than UL. But, at age 70 that is probably not a primary concern. But you might want to present both options:
1 - UL flexed for lowest premium, correct death benefit and target low to no CSV (you can set it up to have say $1 CSV keeping the policy alive at age 100, stuff like that)
2 - UL as above and WL product paid 20-years to age 90 then paid up (it used to be popular in the 80s to fund that with dividends but that is never a good idea).
Premiums on the WL would be higher than UL in option 2 but that way you give full disclosure and let the client decide. [COLOR=Blue]Probably he is going to want highest DB at lowest premium and little or no CSV[/COLOR]/
Death Benefit is his primary concern - burial.
He also wants a $100k - 20 year Term to go along with it. He also wants ADB and WOP.
Got to go UW. He loved the rate of WL - seems UL may be less expense for same face.
If he likes UL because it's cheaper make sure he knows why it's cheaper so he will never call you in future and say "WTF's going on with my policy?" No Lapse Guaranteed ULs guarantee the policy will never lapse as long as premium's paid. Typical ULs do NOT guarantee that. If he still insists on regular UL have him sign a paper that says he understands what he's getting. JMO
1) If he likes UL because it's cheaper make sure he knows why it's cheaper so he will never call you in future and say "WTF's going on with my policy?"
2) No Lapse Guaranteed ULs guarantee the policy will never lapse as long as premium's paid. Typical ULs do NOT guarantee that.
3) If he still insists on regular UL have him sign a paper that says he understands what he's getting. JMO
1) Why is it cheaper. What's the catch?
2) Is this a choice?
3) I guess once I understand it - he should too.
Besides rates - what would be the difference in a $25k WL versus UL. What are the pros and cons?
I want to sell him what makes the most sense - and then translate that to him.
Besides rates - what would be the difference in a $25k WL versus UL. What are the pros and cons?
I want to sell him what makes the most sense - and then translate that to him.
I see why I like FE - lol . . .
Tom
First of all I'm no expert so anyone please correct me if I'm wrong.
1) It's cheaper because it's not guaranteed to last lifetime. You mentioned the illustration showed policy lapsing in 20 years. I think you were looking at the guaranteed column. That's what the carrier's willing to guarantee under that particular design (premium, CSV, target etc).
2) Ask him if he wants a guarantee that his policy will never lapse or if he's willing to take some risk for lower premium/higher DB. If former > WL or No Lapse Guarantee UL, if latter UL.
In short you pay for the guarantees. You may get a better deal without them or you may not.
Guaranteed UL = Permanent term insurance. It's cheaper than WL because it is designed to build then lose its cash value over time and have a level death benefit. Just make sure there is a guarantee on it so that it is not essentially expensive term insurance.
WL builds cash value over time and the death benefit can actually grow over time due to dividends the company pays out. WL also has the potential of paying for itself after 15-20 years of premium payments.
Both have their uses, you should still bone up on it before presenting to your client.
Maybe you should just tell the guy you can't help him, rather than potentially screw him over for a couple hundred bucks...
Maybe you should take the time since you only "work" 4 days a week, use that 5th day and study a bit.
You're dealing with a senior market and a hard to insure market.. you f up a few times and you're a poster boy for a insurance commissioner who wants to get re-elected.
You are playing with fire, you should learn your stuff. You may not find this industry as easy to walk away from as you had some of the others in the past where you've messed up. Educate yourself for your clients sakes.
I only focus on FE - but i have a lead that is determined to get UL. He is 60 and in perfect health - excellent actually.
Keep in mind that ul products are mostly underwritten products. You say that his health is perfect and excellent. How do you know that? Does he have a physical and bloodwork every year and you asked some basic questions, including things such as whether he had a DUI or not? How about his parents. How old were they when they died and what was the cause?
When you quote him it has to be based on a rating and some basic logic and inquiry to go with it. If you are doing FE you are probably just used to pass/fail type simplified applications. That is fine but dont assume that this guy is super preferred just because he is feeling well and looking good. You would be low-balling the quote which will get his attention but will blow up on you later if you have to go back and give him the real premium cost unless you set his expectations properly.
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It sounds like what the client is asking about is the UL that is guaranteed not to lapse. Most companies have a policy that is guaranteed to age 100 or 120.
Think of it this way:
Whole life is designed to build cash value throughout the life of the policy and that cash value will be equal to the death benefit by age 95 or 100. They are self insured at that point.
In reality, if someone buys a $10,000 whole life policy at age 20; if you look at the policy around age 60, they are not really insured for $10,000 anymore. They have cash value of say $5,500 and they are insured for $4,500. At age 100 they have $10,000 cash value and zero insurance.
That is how straight whole life works. Every year the cash value (self-insured amount) goes up and their actual insured amount goes down and both always equal $10,000 when combined.
Guaranteed UL works very different. It is like term life insurance that is guaranteed to age 100 (or better 120.) You are not building steady cash value (self-insuring) you are always covered by the term-type insurance for the entire time. It only builds enough cash value to keep the policy in force. It also has more flexability of the premiums because you can pay more in the early years to reduce your premium in the later years.
Maybe you should just tell the guy you can't help him, rather than potentially screw him over for a couple hundred bucks...
Maybe you should take the time since you only "work" 4 days a week, use that 5th day and study a bit.
You're dealing with a senior market and a hard to insure market.. you f up a few times and you're a poster boy for a insurance commissioner who wants to get re-elected.
You are playing with fire, you should learn your stuff. You may not find this industry as easy to walk away from as you had some of the others in the past where you've messed up. Educate yourself for your clients sakes.
You are correct but that's not how Tom operates. Find a product - any product - that will produce a commission. That's the goal. Never walk away from a cash cow even if you haven't a clue how to do something.
This is exactly why I'm always on Tom's ass for how he operates. Most of us paid our dues and actually learned about the products we sell. I can sell LTC but I choose to refer it to an expert. I can write DI but I choose to refer it to an expert. To be a good agent, you need some expertise in your chosen field. Tom is an "expert" at trying to make a buck without doing the work.
This business is not like selling someone a hammer. You can seriously screw someone even if you have good intentions. If your first intention is how easily you can earn a commission, then you'd be Tom.
Permanent life insurance originally was offered as a fixed premium fixed return product known as whole life insurance also known as cash surrender life insurance. This offered consumers guaranteed cash value accumulation and a consistent premium. Consumers later wanted more flexibility which was offered in the form of Universal life insurance allows consumers flexibility in when premiums are to be paid and the amount that they would be. Universal life policies also allowed consumers to permanently withdraw cash from the policy without the interest associated with the loan provisions in whole life policies. Universal life policies retained the fixed investment performance of whole life policies.
Whole Life Whole Life Insurance, or Whole of Life Assurance (in the Commonwealth), is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy. Universal Life Universal Life offers a flexible premium policy to meet your changing needs. It is designed to provide cash accumulation, and provide guaranteed coverage during the various No-Lapse periods provided No-Lapse requirements are met. Universal Life can be customized with many options and riders.
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Mark Rosenthal aka markingriffin
IMO/Ins Agent/Agent Trainer/Free Advice markcrosenthal@aol.comwww.realfastservice.com
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For those attempting to explain whole life... please understand there is a real difference between "whole lifes" sold by mutual companies and stock companies.
There different versions of whole life some credit an interest rate others pay the guaranteed rate AND dividends.
Dividends are the silly putty of insurance as they are not taxable income but can be received as cash, or used to reduce the cost of insurance (term in reverse), held at interest(those gains might be taxable...it's been awhile) or used to buy paid up insurance increasing the face amount of the policy and increasing the dividends paid in the future.
Whole Life vs. Universal Life
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