Anyone Run Across Northwestern Mutual?

[briko3]

He might be a wiseguy, but he's right. Term insurance doesn't fit everywhere just like whole life/UL, etc. doesn't fit everywhere. I think we can all agree that we should see what fits the client's situation the best and help them get what they NEED.

 

[coachd]

I find that we who really want to do best by the client most throw out what type of Life Insurance we think is best. Not all case are the same. We most look to what is best for the client. What are they trying to do?

I do not understand all the finer points of life insurance and have looked for some one to teach me more for years. I find that many only want to teach one thing. THEIR product.

I was trained by a great company about a lot of things, but know other agents older than me or in the business longer should be able to provide great education to me to help kick another agents butt only selling what they are told, and not what is best for the client.

As for me. I would like to hear more on how you all beat some of the other policies, and more about the inner working of the products. I might know some of it, but I know I would learn some new information too.
Thanks

 

[briko3]

Here's the trick:

If someone has insurance and is still willing to talk to you, something has them thinking. Maybe it's wondering if there's a better price. Maybe it's mistrust in their previous agent and they want to make sure their policy is the best out there for their needs. Sometimes it's that they no longer need the cash value and care only about DB or maybe it's the opposite.

It's our job to listen and ask the right questions to find out what they're worried about and find something within their budget that fits that need.

After that it's all about prospecting to find the people to do the above with

 

[BNTRS]

I find that we who really want to do best by the client most throw out what type of Life Insurance we think is best. Not all case are the same. We most look to what is best for the client. What are they trying to do?

The idea that there are several products made for several situations is a myth, and people unwilling to let their prospects walk because they had the courage to stand up for the right thing and tell them they can't have their cake and eat it, too.

I hear a lot around here about what is the client most concerned about with respect to death benefit or cash value.

If I go to the doctor because my knees hurt and I'm looking for medicine to make the pain go away, all the while it's determined that the souce of my pain is due to life style, is it not ethical and correct for the docotor to tell me somewhat forcefully that my concern should be with how I'm making my knees hurt, regardless to how uninterested I am in listening to this information?

If I go to the attorney and tell him I need/want a Last Will and Testament and that's all I need thanks much, and while talking it turns out I'm worth 10 million dollars, and a wife and kids, and have done nothing with regards to estate planning, should the attorney just write my Will, send me the bill, and move on?

If it's not ok for the doctor or attorney to ignore the bigger picture, while hidding behind client wants and stated needs, why is it ok for insurance agents? Most of the people I run into claim to have at least some expertise in finance, but when it comes down to the opportunity to truly make recommendations to their clients they screw the pooch and do "what the client wanted," as if the client could possibly understand this topic anyway near enough to intelligently tell me, or anyone else out there who holds an insurance license what they actually wanted.

 

[NMFNMDRT]

I hadn't seen much of NML until I moved to Wisconsin - granted it is their backyard.

Does anyonerun across them very often? I would like to talk about their policies.

It seems that I am running across newer agents; they are using a lot of "vanishing premium" presentations to sell policies.

Specifically, I am working on a situation where a prospect has had an Adjustable Comp Life for 7 years. He had a new NML agent bring him an inforce illustration during an appointment to discuss not paying premiums anymore. A couple of things concerned me as the prospect allowed me to look over the ledger and the notes he had written on them during that meeting:

1. NML agent only provided 1 page of the illustration (the non-guaranteed ledger). Left out the other pages.
2. The premium for the term portion is only guaranteed for 7 years evidently.
3. Ledger clearly states that it assumes a 5.15% dividend rate. Agent told prospect it is currently 6.15%.
4. On the cash value column, prospect wrote that the agent said it is currently growing at 6.15%.

I expected healthguy to be the first to comment on this topic.

What portion of this policy is base whole life/adjustable term protection? Is it a MEC in the 7th year? What was the original purpose of the policy? I've never heard of "Vanishing Premium" policies.

1. What pages did you want to see?

2. Adjustable term portions are usually guaranteed for a period of 14-20 years depending on the age of the individual.

3. NWM is currently paying a 6.15% dividend on unborrowed CV. Unless he has a max loan he is not getting 5.15%.

4. I think it is.

Dividend interest rates are misunderstood by a lot of people. NWM may pay out the most in dividends, but our guarantees are not as high as many, so don't pay attention to a lot of the marketing fluff. It does help that we are the largest individual life insurance company as well, so I hope we pay the most dividends.

The real reason NWM is a strong company is due to our mortality ratios, expenses, and persistency. That isn't as flashy, so you don't hear about it as much.

As far as replacement is concerned...find out if the increase every year in the cash value is more than what he is paying in premiums. That should answer your question.

 

[BNTRS]

What portion of this policy is base whole life/adjustable term protection? Is it a MEC in the 7th year? What was the original purpose of the policy? I've never heard of "Vanishing Premium" policies.

Vanishing premium is an old sales technique used to illustrate dividends offsetting premium. Essentially agents would tell prospects that the policy would pay for itself at some point in the future, and run an illustration with dividend option set to pay premium or to be paid in cash. The ledger would then show the premium diminshing until there were enough projected dividends to completely pay for the premium.

The problem, as you can likely guess, was that dividend performance didn't always hold up to the projection, and some people found themselves having to make premium payments longer than anticipated. Selling a policy on the basis that it will be self sustaining in the future is illegal in all 50 states. This is one of the reasons you'll notice a lot of paragraphs in illustrations speaking to the fact that dividends are not guaranteed.

To be clear, it's not illegal to mention the fact that dividends could pay premiums. But unless the policy is desgined to be guaranteed paid up, it's illegal to assert that the policy will require no further premiums at some point in the future prior to its guaranteed paid up year.

 

[Newby]

Vanishing premium is an old sales technique used to illustrate dividends offsetting premium. Essentially agents would tell prospects that the policy would pay for itself at some point in the future, and run an illustration with dividend option set to pay premium or to be paid in cash. The ledger would then show the premium diminshing until there were enough projected dividends to completely pay for the premium.

The problem, as you can likely guess, was that dividend performance didn't always hold up to the projection, and some people found themselves having to make premium payments longer than anticipated. Selling a policy on the basis that it will be self sustaining in the future is illegal in all 50 states. This is one of the reasons you'll notice a lot of paragraphs in illustrations speaking to the fact that dividends are not guaranteed.

To be clear, it's not illegal to mention the fact that dividends could pay premiums. But unless the policy is desgined to be guaranteed paid up, it's illegal to assert that the policy will require no further premiums at some point in the future prior to it's guaranteed paid up year.

Yes, there's a special place in hell for agents who sell policies that way. And that place will be very crowded because I run into it all the time.

 

[arnguy]

That technique should have been called "vanishing insurance!"

 

[nycagent]

I think I can clear something up here. I believe that the 5.15% refers to the dividend level the NML agent chose to run the illustration at. While the current rate is indeed 6.15%, this agent was trying to be conservative - he wanted to show, i believe, that the policy would self-sustain even if the dividend dropped 100bps next year and remained there.
NML agents have the ability to run illustrations at any dividend level as long as it doesn't exceed the current level.

on another note, regarding NML's vaunted 'low expenses' - let's remember that is on a % basis, so if you have higher premiums, even if you have the same actual expenses, your % will be lower.

 

[BNTRS]

It's possible that the agent ran a lower dividend assumption on the policy. It's also possible that NML defaults to a lower dividend rate assumption when blending whole life with term, common practice at a few other companies.

Either way it should have been very clear that NML's current declared dividend rate for 2010 is 6.15%. It should also be made extremely clear that this rate does not mean NML policy holders are receiving 6.15% on their premiums, or on their cash value.