An American General UL Converted to a Whole Life or GUL

[RonRoberts]

I have a client's brother who is age 70 in Ohio that called me today that tells me he has had a UL policy with American General for about 26 years (currently has around $700 cash value). An AG agent came to his house today and wrote a new policy for approximate $25,000 coverage for $156 per month and explained to him that his rate would never go up nor would the benefit ever go down. The agent kept referencing this policy as a Master policy. Has anyone ever heard of this? I am not licensed in Ohio so this is purely for the sake of the brother. Thanks.

Ron

 

[dgoldenz]

Probably a guaranteed UL.

 

[VolAgent]

FYI, a permanent to permanent transaction is an exchange, not a conversion. It is rarely allowed without going through underwriting. Odds are, this guy's policy has no such feature. So he is probably going back through underwriting. Depending on health there may be better options.

 

[RonRoberts]

Probably a guaranteed UL.

This is what he thinks it is but the agent did not leave any paperwork so he really does not know what he signed for.

FYI, a permanent to permanent transaction is an exchange, not a conversion. It is rarely allowed without going through underwriting. Odds are, this guy's policy has no such feature. So he is probably going back through underwriting. Depending on health there may be better options.

Thanks for the correction on terminology. He is the one that told me the agent used the word convert and I sure as heck don't know any better. His only health issue was that he was diagnosed with an aneurysm 6 months ago. With this condition do you think something is better than $156 a month for $28,000 coverage?

Thanks,

Ron

 

[rousemark]

I have a client's brother who is age 70 in Ohio that called me today that tells me he has had a UL policy with American General for about 26 years (currently has around $700 cash value). An AG agent came to his house today and wrote a new policy for approximate $25,000 coverage for $156 per month and explained to him that his rate would never go up nor would the benefit ever go down. The agent kept referencing this policy as a Master policy. Has anyone ever heard of this? I am not licensed in Ohio so this is purely for the sake of the brother. Thanks.

Ron

If a MasterLife (and I'll bet it is).. The agent lied. it is an interest sensitive WL policy that guarantees the initial rate for 5 years. After that, it can go up or down but never exceed the policy maximum rate. They use it to convert dying ULs to whole life. The $700 is rolled into a SPWL rider. The rates aren't competitive at all if the client is insurable.
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FYI, a permanent to permanent transaction is an exchange, not a conversion. It is rarely allowed without going through underwriting. Odds are, this guy's policy has no such feature. So he is probably going back through underwriting. Depending on health there may be better options.

No underwriting required.

 

[RonRoberts]

If a MasterLife (and I'll bet it is).. The agent lied. it is an interest sensitive WL policy that guarantees the initial rate for 5 years. After that, it can go up or down but never exceed the policy maximum rate. They use it to convert dying ULs to whole life. The $700 is rolled into a SPWL rider. The rates aren't competitive at all if the client is insurable.
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How insurable and competitive are the rates for someone diagnosed with an aneurysm 6 months ago.

I just spoke to the gentleman and he tells me the doctors plan on operating within the next 6 months and it is a in and out surgery usually (yeah) with no complications.

Ron

 

[dgoldenz]

He's going to be declined.

 

[VolAgent]

He's going to be declined.

You can take that to the bank. Aneurysm is bad enough, add in the pending surgery and no one is going to even talk to him until after the surgery.

I hope he hasn't cancelled the old policy? If so, he needs to immediately contact AGLA and try to reinstate it.

 

[Larry Tew]

He's going to be declined.

I don't know... wasn't there some guys last week arguing about Senior Life out of Georgia issuing insulin-dependent diabetics Preferred rates?

 

[MGAlady]

WHOAA! Hold the phone. For an underwritten policy, the brother will be declined. For guaranteed issue, it's usually about $1k per $10k of coverage, so $156/month for $25k sounds pretty good. Find out if the brother knows if there will be a medical.
What was the original policy? Who didn't service it? Only $700 of CV after 26 yrs? Did he take loans out? How much was the DB? Before replacing, the brother may want to see how much money could be deposited into the current policy to keep it in force for life. Tell him to ask the first agent that wrote the AG policy, or call AG directly. He is asking for an in-force illustration. Then he wants an illustration showing how much add'l premium needs to be funded for the policy to be guaranteed for life.
Let us know.