Automatic Premium Loans for FE

[Tom Highway]

How do you explain this to your clients?

How do you feel about these, and what is your general practice for having these on apps?

How about adding riders on FE - such as accidental death, family coverage, etc. Do your clients generally not do these or add these to a policy?

 

[G.Gordon]

Back in the day when I was slamming FE big time...

I talked about APL's as a way to keep the policy from lapsing if for some reason the premiums didn't get paid due to bank error, bank changes, or something like that... It's not something you do voluntarily Mr./Mrs. Jones, but it works automatically to pay your "COI" out of the policy value instead of it being canceled.

With most FE companies APL doesn't cost anything, but you have to check a box that says they want that to happen in the event they don't pay the premium. I actually had a policy stay active for eight months taking APL's. The client called when they got the final notice that it would lapse the next month. Money issues were better then so they just signed up for a new bank draft and went along.

Keep in mind it does not take the "montly premium" from the cash value... it takes the amount to pay the cost of insurance... basically just enough to make the policy live one more month until the problem is fixed.


Accidental Death... dirt cheap and if that is the way they get taken out... double the death benefit. I've got it on most policies that I've sold.

 

[jdeasy]

How do you explain this to your clients?

How do you feel about these, and what is your general practice for having these on apps?

How about adding riders on FE - such as accidental death, family coverage, etc. Do your clients generally not do these or add these to a policy?

The FE companies that I have that do have an AD&D rider, I always offer it. Most take it. AmAm's grandchild rider is quite popular.

As for the APL, I just tell people what it is. When I explain cash value in the policy I tell people that the best thing about cash value is that the cash value can be used to keep the policy in force if they end up in the hospital or something and can't pay their bills, they won't lose their life insurance.

That is a big issue to the FE clientel. They didn't get to be 65, 70 or 75 years old and not have their final expenses taken care of because they are financial planners and been good with their money all their lives. This is why UL is not a good fit for the FE market. Even the no lapse UL will lapse if a payment is missed.

I will not sell anything other than whole life for FE. Term has it purposes and I sell a good amount of term. Never for FE. If someone I meet with is dertermined to buy a $10,000 term policy for FE, I give them the number of a guy that will sell it to them. I have never had anyone take me up on that after I explain why I won't sell term for FE.