Are Primerica Agents Allowed to Sell for other companies?

[DHK]

@Ghost I answer your question in this segment:

 

[DayTimer]

Can somebody pick to only have the RVP contract and not recruit? If somebody just wants to be a producer and not recruit for example.

Just pick a solid mutual carrier. All of them will have better products and rates that Primerica.

Unfortunately there are a lot of badly written IUL's out there, where it does make sense to replace them with a term.

Now that is not true unless it is an affordability issue. Why did the person pick an IUL instead of term to begin with? I typically replace garbage IUL's with final expense or fully underwritten over-funded whole life, depending upon the client's age, health, and situation in life.

I guarantee you that when they were sold the IUL, it was not for the attached term policy.

 

[toolbelt]

Can somebody pick to only have the RVP contract and not recruit? If somebody just wants to be a producer and not recruit for example.

While some during the early years were placed directly into RVP positions, promotion is based in large part by reaching recruiting thresholds. That's not to say you can't remain an RVP even if your downlines all leave.

 

[Ghost]

Just pick a solid mutual carrier. All of them will have better products and rates that Primerica.



Now that is not true unless it is an affordability issue. Why did the person pick an IUL instead of term to begin with? I typically replace garbage IUL's with final expense or fully underwritten over-funded whole life, depending upon the client's age, health, and situation in life.

I guarantee you that when they were sold the IUL, it was not for the attached term policy.

I think a lot of agents don't understand how the IUL works and they'll sell a 50 year- old an IUL for $100 a month to "start saving" and write it at target to make more commission, that's how the cash value is so little. Unfortunately a lot of people just think about the sale and not helping out the client the right way.

 

[DayTimer]

I think a lot of agents don't understand how the IUL works and they'll sell a 50 year- old an IUL for $100 a month to "start saving" and write it at target to make more commission, that's how the cash value is so little. Unfortunately a lot of people just think about the sale and not helping out the client the right way.

I agree.

Indexed Life: Illustrating at Nearly 14%

Only whole life hads the guarantees necessary to make the promises to our clients many are making on behalf of IUL's. The cost of insurance is not guaranteed. The future cash values are not guaranteed. The future cap rates are not guaranteed (look at what F&G did to their IUL's). Yes, you have to overfund the IUL, you have to put tons and tons of cash in there and even that will not guarantee that the policy does not implode. And then what happens? All those gains become immediately taxable.

Agents can keep pitching IUL's because, I get it, it is an easy sale: "How would you like a life insurance that allowed you to participate in the market's upside while being protected against the down side risk?" Sounds great!

Agents can keep pitching, but I'm going to kep swinging at it until the day it is finally hit out of the park. It is a term policy with a cash account. And like the government and the Social Security Trust fund that term policy IS going to come and raid that cash value. You really think your clients will be able to draw down tens of thousands of tax free dollars as retirement income and the policy will survive? Not so ... and there are agents right now who wrote the first "new" iterations of IUL's who are learning the same painful lesson that has been learned by all the preceding generations of IUL's: Nothing of any importance is guaranteed. Your client had better hope for an early death.

 

[Allen Trent]

All those gains become immediately taxable.

Agree with every single point you made, except not following this one

 

[DayTimer]

Agree with every single point you made, except not following this one

I got that one from Tom Hegna so I'm going to run with it unless you can tell me how it is inaccurate. Not necessarily doubting you, but Hegna carries some weight on this, imo.

 

[Ghost]

I agree.

Indexed Life: Illustrating at Nearly 14%

Only whole life hads the guarantees necessary to make the promises to our clients many are making on behalf of IUL's. The cost of insurance is not guaranteed. The future cash values are not guaranteed. The future cap rates are not guaranteed (look at what F&G did to their IUL's). Yes, you have to overfund the IUL, you have to put tons and tons of cash in there and even that will not guarantee that the policy does not implode. And then what happens? All those gains become immediately taxable.

Agents can keep pitching IUL's because, I get it, it is an easy sale: "How would you like a life insurance that allowed you to participate in the market's upside while being protected against the down side risk?" Sounds great!

Agents can keep pitching, but I'm going to kep swinging at it until the day it is finally hit out of the park. It is a term policy with a cash account. And like the government and the Social Security Trust fund that term policy IS going to come and raid that cash value. You really think your clients will be able to draw down tens of thousands of tax free dollars as retirement income and the policy will survive? Not so ... and there are agents right now who wrote the first "new" iterations of IUL's who are learning the same painful lesson that has been learned by all the preceding generations of IUL's: Nothing of any importance is guaranteed. Your client had better hope for an early death.

If it's properly structured, the cash value does perform well... I still haven't seen an IUL implode though, on the contrary, I've seen them go up but only when done correctly. It's not like Wholelife policies are magical either.

 

[Allen Trent]

I got that one from Tom Hegna so I'm going to run with it unless you can tell me how it is inaccurate. Not necessarily doubting you, but Hegna carries some weight on this, imo.

I think you might be misinterpreting a specific example of Hegna. Maybe he was talking about a UL/VUL/IUL that did so well that it had gains & the client extracted out a ton of money in loans. The IRS counts both the money you took out plus the loan interest charged in the calculation to see if you have a gain. If you lapse/surrender/1035 those gains are reported as taxable. But that is true with WL & extremely rare because you 1st have to have gains, many policies have overloan protection.

In this thread example, there would never be a gain as the policies were poorly designed with too much face amount & no overfunding.

Hegna normally talks about Annuities & SPIA. Taking withdrawals from NQ annuities are immediately taxable as you have to take all the deferred gains out 1st before you can get to your cost basis tax free. But if you annuitize as a SPIA, the gain is spread out as a pro rata amount each month over the life of the payout checks, so each month a portion of money being paid on a NQ SPIA is tax free. It's called the Exclusion ratio in the tax code. Total all the future checks divided by your own cost basis determines the % of each check that will be reported each year as taxable. NOTE: Life insurance policies can also be annuitized as a SPIA check if needed for income & exclusion ratio applies

 

[DayTimer]

I think you might be misinterpreting axspecific example of Hegna.

I may be, though not intentionally. I'll try to find the video where he explains it and if I do I'll post the link here.