Agents don't mention PUA rider, why?

Mar 24, 2019

  1. ls015
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    ls015 Expert

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    Majority of agents don't design WLs with PUA riders. They will blend with term insurance and that's it. Mostly, base premium it is. I wonder why? Is it commission or something else?
     
    ls015, Mar 24, 2019
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  2. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Vast majority of agents don't know how or why to recommend a max-funded policy to the MEC guidelines. So they ask for how much the client can afford... and design the most protection for the premium, which is usually a blend of base WL and term. Perhaps using the future dividends to convert the term to permanent long-term. (A death-benefit only design.)

    And if they work THAT way, then designing a plan with higher expertise will actually cut their commission than if they didn't.

     
    DHK, Mar 24, 2019
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  3. ls015
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    ls015 Expert

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    But doesn't PUA premium generate commission too? Something like 2%? 2% of much larger PUA premium is greater than 1 time of 100% of base premium, isn't it?

    I am not sure if it's 2% every year or just one time of PUA premium.
     
    ls015, Mar 24, 2019
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  4. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Comparing 2% vs 45% for term rider and 55% base WL... which do you think the AGENCY wants you to sell?

    If you have $10,000 per year to work with... and you're going to put $5,000 in the PUA rider... that's only 2% x $5,000 = $100. I'm pretty sure the difference into the base WL and term riders will generate a FAR greater commission than $100.
     
    DHK, Mar 24, 2019
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  5. ls015
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    ls015 Expert

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    Wonder what do insurance companies themselves want? Just base premium or PUA premium?
     
    ls015, Mar 24, 2019
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  6. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Insurance companies want quality risks to spend lots of money on premium and not die for a long time.
     
    DHK, Mar 24, 2019
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  7. ls015
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    Yeah but do they have a preference on base vs PUA premium?
     
    ls015, Mar 24, 2019
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  8. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Since using PUA for a given amount of premium LOWERS the amount at risk, I would suggest that they *should* want more maximum-funded policies.
     
    DHK, Mar 24, 2019
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  9. ls015
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    ls015 Expert

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    Do banks want our deposits? No, deposits are a liability for them, they have to pay interest, safe guard.
    PUAs are the same for life insurance companies as deposits are to banks. I think they want more base premium. If they wanted more PUAs, they would pay more to agents on that but they pay more on base premium. This is just what I feel, not to prove you wrong or anything. Appreciate your responses.
     
    Last edited: Mar 24, 2019
    ls015, Mar 24, 2019
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  10. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    "Fund the box or pay the curve."

     
    DHK, Mar 24, 2019
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