Average Lifespan of FE policy???

[NewbieNewbie]

I know that is why strong persistency killed LTC. That was my point.

 

[Allen Trent]

I still can’t see how fe CO’s make money

Completely agree, cannot figure how the math works especially in the low interest rate environment

 

[rousemark]

best guess is 8-12 years?

I wouldn't think anywhere close to that. Companies loose approximately 20% the first year and another 15% or so the second year. Then you take into account the claims that are paid sometime in the first 10 years of the policy. I have life plans that have been on the books over 10 years but they aren't the majority. I have many more cancer plans that have been in force 20 years. (they aren't the majority either)

 

[DonP]

I remember Twilight saying that CO’s told him 5 yr persistency was less than 50% on fe policy’s . I went back and looked at some 2015 Trans commission statements and I looked at a 2021 statement and was amazed how many weren’t on there . Wether it was lapses or death or whatever . That’s why they say renewals are just gravy in fe .

 

[HoosierLife]

I remember Twilight saying that CO’s told him 5 yr persistency was less than 50% on fe policy’s . I went back and looked at some 2015 Trans commission statements and I looked at a 2021 statement and was amazed how many weren’t on there . Wether it was lapses or death or whatever . That’s why they say renewals are just gravy in fe .

Some big IMO CEOs have told me they expect 60% of what is written to stay on the books by month 13. That includes lapses and not takens though.

Now I’ve never had number anywhere close to that bad. So lots of somebody’s must have really really bad persistency.

After that, who knows. I’m sure if I could read some of these commission statements I could tell you smh.