- 29,489
At least Al did one thing in his life that I liked.
AARP unisex whole life
- Thread starter nfl72
- Start date
- 16,881
You guys need to study up on what makes group plans different than individuals. But they are way different.
But a major one is that group plans can be changed ar the will of the policy owner. And very often are. They don’t need to be financially failing to do it.
A fraternal can assess members equally but only to preserve the financial stability of the fraternal organization which is owned by the members. Most fraternals have operated well over 100 years and been through world wars, the Great Depression and several market crashes and never had to do any assessments. Others that have done assessments regained financial stability and made the members whole. I’ve only seen one example of one very small fraternal that assessed members when they failed and those members retained 75%. I’m sure there has been more than one. But it’s a very rare occurrence. That is a MUCH better record than group plans which commonly change or end and just usually offer the certificate holders horrible options if they want to convert. Had one in my office yesterday as a matter of fact.
A stock company under the same financial conditions could NOT access equally. They would pay claims and or cash out on a first come basis until they couldn’t pay anymore. Agents talk about “state guarantee” funds like they are FDIC insurance for insurance companies. But they are not even close. State guarantee funds are just a fraternity of insurance companies that agree to come up with money to bail out failing companies under certain conditions and only certain policies. There is no state guarantee association that has any money. They all have zero. There is no state guarantee association that has any guarantee backed the the state or any other government entity. No state will pay any money to bail out a failing insurance company. It is an industry created feature that is there to back up failed companies so the remaining companies remain stable in the minds of the public. But it has conditions and limited by the ability of the remaining companies to bail them out without damaging themselves.
All insurance has some risk. That’s why you only rely on the claims paying ability of the insurance company you choose. That is all there really is. That is printed on all brochures for life insurance and annuities.
But group insurance doesn’t have to be failing to make changes. And it’s not uncommon for that to happen. Somehow the members of the group are always caught off guard when it happens though.
But a major one is that group plans can be changed ar the will of the policy owner. And very often are. They don’t need to be financially failing to do it.
A fraternal can assess members equally but only to preserve the financial stability of the fraternal organization which is owned by the members. Most fraternals have operated well over 100 years and been through world wars, the Great Depression and several market crashes and never had to do any assessments. Others that have done assessments regained financial stability and made the members whole. I’ve only seen one example of one very small fraternal that assessed members when they failed and those members retained 75%. I’m sure there has been more than one. But it’s a very rare occurrence. That is a MUCH better record than group plans which commonly change or end and just usually offer the certificate holders horrible options if they want to convert. Had one in my office yesterday as a matter of fact.
A stock company under the same financial conditions could NOT access equally. They would pay claims and or cash out on a first come basis until they couldn’t pay anymore. Agents talk about “state guarantee” funds like they are FDIC insurance for insurance companies. But they are not even close. State guarantee funds are just a fraternity of insurance companies that agree to come up with money to bail out failing companies under certain conditions and only certain policies. There is no state guarantee association that has any money. They all have zero. There is no state guarantee association that has any guarantee backed the the state or any other government entity. No state will pay any money to bail out a failing insurance company. It is an industry created feature that is there to back up failed companies so the remaining companies remain stable in the minds of the public. But it has conditions and limited by the ability of the remaining companies to bail them out without damaging themselves.
All insurance has some risk. That’s why you only rely on the claims paying ability of the insurance company you choose. That is all there really is. That is printed on all brochures for life insurance and annuities.
But group insurance doesn’t have to be failing to make changes. And it’s not uncommon for that to happen. Somehow the members of the group are always caught off guard when it happens though.
- 5,778
We bailed out a car company and some banks... the state might not... but it seems like if its "to big to fail" the fed will.
- 16,881
Any huge company would stand a chance of that. AIG got assistance. Harley Davidson got assistance. Chrysler got assistance. But it’s all case by case even for huge companies.
- 4,024
Newby, I just took a call from a guy I wrote up but hasn't been issued yet. He wants to cancel. Says he's staying with AARP & NYL because they gave him a better deal. I went through the whole group certificate vs individual policy thing with him, and told him to call them and ask if the rates are guaranteed to never change. He said he would do that.
But then I remembered that the reason they have a "permanent" plan to offer is because of competitive pressure from agents like us. Globe Life in response to similar pressure raised their termination age to 90 when I was still telling people it was 80.
So, I thought I would check their website. On the page for Permanent Life Insurance, it does indeed say that it's a group plan. But under the heading "Features and Benefits" I found the following:
Features and Benefits
- Up to $50,000 in life insurance coverage
- Guaranteed rates that will never increase
- No medical exam - just health and other information
- No waiting period
- Permanent insurance you can keep your entire life
- Simple application; most who apply are accepted
- Higher coverage options also available. Call 1-800-865-7927
- 4,024
They also have the following in the explanatory paragraphs:
Guaranteed Rates Will Never Increase
Your monthly premium is based on your age when you apply, and will not increase simply because you grow older or your health changes.
So, is this a change to the plan, or have we been wrong all along? Is the "fine print" still in the certificate? Does anybody have a copy they'd be willing to share with the group?
- Thread starter
- #37
- 29,489
They're contradicting themselves. Right under "Guaranteed Rates Will Never Increase", it says they CAN raise the rates....just not individually.
- 4,024
Right. I missed that. Thanks. I may save this case yet, although I've found it hard to do when somebody makes a decision like he did. It almost doesn't matter what you say. Often people are just more comfortable staying with the devil they know.
- 3,991
There is a large percent of AARP certificates that say “ premiums can be changed on a class basis”
Other newer certificates say “premiums are guaranteed not to change” but when you read out loud the “policy changes” verbage to your prospect that’s the game changer.
Other newer certificates say “premiums are guaranteed not to change” but when you read out loud the “policy changes” verbage to your prospect that’s the game changer.
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