2023 OneAmerica Dividend Announcement

[DHK]

Dividend scale remains unchanged from prior year.

OneAmerica doesn't publish their dividend rate believing that the public doesn't understand it, agents misrepresent it, and each company has their own formula.

They're not wrong.

 

[Allen Trent]

Dividend scale remains unchanged from prior year.

OneAmerica doesn't publish their dividend rate believing that the public doesn't understand it, agents misrepresent it, and each company has their own formula.

They're not wrong.

Literally just had an acquaintance tell me he bought a NWM WL he pays $10k into for 3 years & it has a 6% dividend. I asked 6% of what.he said on all his premiums & CV it is making 6%. I said awesome. I said after 3 years, you now have 33,800 right? He said no, it is about $14k currently.

I told him to look at any year in his projected, not guaranteed illustration, & find me a year where his CV in current year grows by 6% after subtracting that years premium. He said it doesn't. Base CV grows by 2% & non guaranteed with dividend another 2% in some later years. I asked where the 6% it is making went. He literally said WTF

He is an agent that doesn't even know what he is selling but drank the Kool aid of the dividend announcements & indoctrination

I told him NWM has a great WL product & I love WL, just quit giving people that can't do math the wrong impression as they rely on your statements. Also made him pissed that all 10k of his premium is going into base WL rather than maxing out the PUAR for future liquidity & for flexibility to not be obligated to the entire premium.

In his defense, he doesn't sell very much insurance as he & his wife own other businesses that distract him.

My long winded point is One America is right. Consumers & most agents don't understand what a dividend rate is or the minutae each carrier puts into it or which policy receives that rate

 

[Newby]

Dividends CAN be dangerous. I have seen MANY participating policies crash because people with old policies were relying on dividends to pay premiums and thought they had purchased 10- year paid up or 20-year pad up insurance. I learned that any time people say they have a paid up policy to check what they really have and 75% of the time they did not have paid up whole-life but they thought they did. This is definitely something to watch for in the field.

I once sold a PreNeed policy to a farmer with a LOT of cash flow. He had taken a policy with Northwestern Mutual with $35,000 annual premium and he was convinced it was a guaranteed 3-year pay and then the dividends would carry it the rest of his life. He was crushed when I told him those dividends are absolutely not guaranteed to carry the policy. He didn’t have the policy with him for me to review because he met with me at the funeral home. But I fired him up and left to go home and what to look for. When I delivered my policy a couple weeks later he told me that I was 100% right and he just couldn’t believe that they had sold it to him like that. He claimed the agent absolutely presented it as three-year paid up through the entire sales presentation. I don’t know about that, I wasn’t there.

 

[DHK]

My long winded point is One America is right. Consumers & most agents don't understand what a dividend rate is or the minutae each carrier puts into it or which policy receives that rate

Exactly.

I was quoted in an article specifically about this:

https://www.ethics.net/articles/misrepresentation-and-ignorance-a-dangerous-blend-for-ethics

Whole life dividend rates

A third issue Kinder mentions is how agents describe whole life dividend rates. “Companies put out an ad in The Wall Street Journal saying ‘7 percent dividend,’ and now agents are saying that their policies are paying 7 percent. No, that's not how a dividend works. A dividend is not a rate of return on the cash values of the policy. Dividends are a surplus of earnings distributed to their mutual policy shareholders,” he said. “Agents should not be connecting the insurance company dividend to individual policy performance ... but it happens all the time.”

 

[Allen Trent]

Exactly.

I was quoted in an article specifically about this:

https://www.ethics.net/articles/misrepresentation-and-ignorance-a-dangerous-blend-for-ethics

I attended a ton of Kinder training over the years. They were no innocent bystanders in some of these inflated concepts on Dividends, APPO premium vanish, etc. Great people, great trainers, just a little too deep in the kool aid for me about WL only & term is terrible, etc. That leads a lot of agents to believe it is OK to sell someone a $25k starter WL that has a spouse & young family that needs maximum protection to get started

 

[DHK]

Everybody always asks me, but I'm not related to the Kinder Brothers. Based on their "New Agent Success Kit", I'm not much of a fan either. It's certainly not compliant.

But everybody asks me!

 

[shooter]

I attended a ton of Kinder training over the years. They were no innocent bystanders in some of these inflated concepts on Dividends, APPO premium vanish, etc. Great people, great trainers, just a little too deep in the kool aid for me about WL only & term is terrible, etc. That leads a lot of agents to believe it is OK to sell someone a $25k starter WL that has a spouse & young family that needs maximum protection to get started

That is the reason I left Liberty National as an agent 40 years ago.
I was a young 2nd year agent; I sold a young couple a 20-year term.
We didn't have longer term period than that at the time.

Turned in the application, the sales manager called me in his office.
Quote, (get back out there and sell them a WL instead of this term, I don't get
credit for term, and my wife wants to go on the cruise Liberty is having
this year).
Needs first, right?

Shooter

 

[Allen Trent]

That is the reason I left Liberty National as an agent 40 years ago.
I was a young 2nd year agent; I sold a young couple a 20-year term.
We didn't have longer term period than that at the time.

Turned in the application, the sales manager called me in his office.
Quote, (get back out there and sell them a WL instead of this term, I don't get
credit for term, and my wife wants to go on the cruise Liberty is having
this year).
Needs first, right?

Shooter

Wow, but doesn't surprise me.

There wasn't alit of 20 year term was there in early 80s. I started in 1996 & even then only saw 3, 7 & 10 year term common place from the 1980s. I remind newer agents today that some of the UL they see crashing was really only designed to last in some cases to age 60 or 70 because term didn't last near as long as it does today. So, UL funded to last for 25-45 years was a compromise between too short of term & WL