Annuity Instead of Life Ins for Seniors?

[bar77kay]

I work in the senior market with FE and Med Sups, I try to do the right thing and sometimes, it just doesn't make sense for older people to put money in a life policy that they may pay more into than there beneficiary will ever get back. My question is this, do any of you agents know of a company that would take a small monthly payment into an annuity as an option to a Life policy? I am not sure exactly what the age is, but someimes you can almost wait to late to buy life ins. There may not be any annuity company that would take $50 dollars etc? Just thought I would ask.

Thanks
Ky Agent

 

[Newby]

That product does exist but I'm not sure it can be sold outside of the Preneed (funeral home) network.
ForeThought, Homesteaders, NGL, Lincoln Heritage all offer it.
The basic concept is: for a $10,000 funeral you divide $10,000 by 60 to pay it off in 5 years.
The problem with the product is it only gets interest on the amount you have paid in so it does not keep up with inflation.
There is also no death benefit over what has been paid in.
It's not a very popular product but most Preneed companies do offer it.
With most companies it's called the "flex" product because people can pay whenever they want and skip months anytime they want with no lapse or fees.
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It never stays on the books. People start out with good intentions but usually taper off quickly. They get a payment book and can mail in payments anytime they want.
American Memorial sells it through Dignity funeral homes too.

 

[Larry Tew]

Many insurance companies will do a flex-premium fixed annuity on bank draft for that amount... but it may not be through the "name brand" companies. Fraternals like Modern Woodmen have this.

 

[Newby]

Many insurance companies will do a flex-premium fixed annuity on bank draft for that amount... but it may not be through the "name brand" companies. Fraternals like Modern Woodmen have this.

Have you had any luck keeping those on the books?
I've probably sold around five of them and all fizzled out quickly.

 

[briko3]

If you advise someone to do that without getting a lot of waivers for your file, you're going ot get sued. If they die next month and their family finds out they have an annuity instead of a life insurance policy when the originally came to you for life insurance.....good luck.

 

[Newby]

If you advise someone to do that without getting a lot of waivers for your file, you're going ot get sued. If they die next month and their family finds out they have an annuity instead of a life insurance policy when the originally came to you for life insurance.....good luck.

There is no problems like that. They aren't told that it's life insurance.

Lawsuits usually follow the money andan agent makes WAY more money selling them life insurance than he would that type of annuity.

If they set up a bank account they don't have a death benefit over what they paid in either.

 

[Larry Tew]

If you advise someone to do that without getting a lot of waivers for your file, you're going ot get sued. If they die next month and their family finds out they have an annuity instead of a life insurance policy when the originally came to you for life insurance.....good luck.

You may have a point, but your statement isn't relevant to the original post. He's not talking about misleading anyone.
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Have you had any luck keeping those on the books?
I've probably sold around five of them and all fizzled out quickly.

I don't recall ever doing one, I just know they're doable. And I suppose if a person is uninsurable, the annuity will be a better deal than a savings account. The annuity is tax-deferred and the annuities I was thinking of have "principal protection" in the event of an early surrender, so the worst case is that a person may lose some or all of their interest earnings.

 

[briko3]

I was only making the point that if someone comes in seeking a death benefit, I would get in writing that they agree an annuity is a better fit for their situation. Remember that the person you're talking to won't be around when the kids come looking for money. The kids just have to have the perception that their parents came looking for life insurance and "that guy" gave them a "bad" annuity.
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BTW, litigation doesn't have to be merited to cost you a lot of money or an E&O claim. Be careful and get EVERYTHING in writing in this situation.

 

[Josh]

Presidential would be your ticket. Commissions would be super low, but they'll take that low of a contribution.

 

[Norwayguy]

There are many companies that do a flex premium Annuity for $50 per month on bank draft...I put them on the books and they last all the time....Having said that I have never done one for a senior in place of Life Insurance...These are people saving for retirement so I have no idea how well it would last and honestly I would sell them the LI because if they croak in a day or two years or whatever the death benefit would be much larger than the amount paid in...

To the OP if the senior really asks about this just be honest and explain its a fact of life based on waiting to this age to purchase this type of product...by product I mean a FE plan that is not going to be getting dividends to increase the face amount.