Best company for ROP Term?

[David C]

I just pulled the file on my last death claim. I notified Illinois Mutual on 10/09/06, I had a check for 50,000 in my possession on 10/20/06.

Senior, Re:Conversions, Many companies allow the conversion from term to permanent. Some allow only a conversion to a permanent plan of THEIR choosing (it could be their worst WL plan), I personally will only sell a plan that allows conversion to ANY permanent plan offered, and without proof of insurability. When do I mention converting it? When I'm closing the term, and every policy anniversary thereafter. Remember, they don't have to convert all of it.

 

[LGilmore]

Usually, if you have the certified copy of the death certificate and you are working on the situation, it is processed fairly quickly. If you leave the people to fend for themselves, it is going to take a while as they don't know the industry.

I would be all over a company that was taking months to process something after I got everything into them. Never would write them again. five to ten working days is exceptable, after that if everything's there, it bs.

 

[djs]

Some states, California being one of them, fine insurance companies if they don't pay a death benefit within a certain number of days (I think 30, not sure what the days are though). The fine is very large, and is enforced, unless there is reason to believe fraud. I don't know all the specifics, since it's been to long since my test, and I've never ran into this as a problem.

The original question - ROP - while I understand it helps the agent and the insurance company to sell them, and it's a decent marketing tool, it's actually not a good thing for the client. The chances of them getting the money back is very low (mirroring the number of policies that stay in force the full term). They are better off putting the extra premium into an investment account and getting a better return on their money.

Problem is, its hard to sell against someone else who is offering ROP and is pitching it as the best thing. Some people want it, and as such, they should get it.

Dan

 

[theman700]

Thanks for the information. I don't do funeral homes but I'll stop by one to find out the details of different arrangements until the Death Benefit arrives. I need to find out what the average funeral really costs in my state anyway. Go Sooner's.

 

[Agent Jeff]

The ROP rider could be made to be a really good idea of that part were exempt from commissions and other expenses. Then the insurance company could probably afford to rebate some cash value even if the policy were surrendered. But wait that would be .

 

[djs]

Commissions have nothing to do with whether or not an ROP rider is a good idea or not. In general, putting your money into some other investment will get you a better return, even if you pay a commission on the other investment.

ROP riders serve 2 purposes, okay, actually 3..
- Makes clients feel better about the amount of money they are spending. They 'win' if they die, they don't 'lose' if they live. (unless they do the math)
- It probably slightly increases the chances the policy will stay in force
- It makes the insurance company more money (you know this, or they wouldn't offer it).

As long as you understand the above, you can position ROP riders for when they fit the client. I don't push them at all, but they are now advertised on the radio, so people ask.

Dan

 

[Newby]

Commissions have nothing to do with whether or not an ROP rider is a good idea or not. In general, putting your money into some other investment will get you a better return, even if you pay a commission on the other investment.

ROP riders serve 2 purposes, okay, actually 3..
- Makes clients feel better about the amount of money they are spending. They 'win' if they die, they don't 'lose' if they live. (unless they do the math)
- It probably slightly increases the chances the policy will stay in force
- It makes the insurance company more money (you know this, or they wouldn't offer it).

As long as you understand the above, you can position ROP riders for when they fit the client. I don't push them at all, but they are now advertised on the radio, so people ask.

Dan

Of the few term policies I have been selling, (about 2 a month) probably half have taken ROP. I don't push it but I explain what it is and how much it affects the payment.

The reason they want it is: they know they will not invest the difference. They know themselves and if they don't add it into the payment, they will piss away the money. Some have self-control themself but a spouse who pisses away any extra money. That's the kind of people who need the structure of something like that.

 

[Newby]

Usually, if you have the certified copy of the death certificate and you are working on the situation, it is processed fairly quickly. If you leave the people to fend for themselves, it is going to take a while as they don't know the industry.

I would be all over a company that was taking months to process something after I got everything into them. Never would write them again. five to ten working days is exceptable, after that if everything's there, it bs.

You should work with some of these companies. I don't write any of them...never did. Just help file the claims. You can't easily complain when they don't let humans get on the phone or when they speak such limited English you can barely communicate.

 

[2112Greg]

The original question - ROP - while I understand it helps the agent and the insurance company to sell them, and it's a decent marketing tool, it's actually not a good thing for the client. The chances of them getting the money back is very low (mirroring the number of policies that stay in force the full term). They are better off putting the extra premium into an investment account and getting a better return on their money.

Problem is, its hard to sell against someone else who is offering ROP and is pitching it as the best thing. Some people want it, and as such, they should get it.

Dan

That's my position on this, as well. I like the IDEA of ROP life, but when you run the numbers, it essentially triples the premium - at least in the cases I've run and I haven't been able to justify this to a single client. Term is already not expensive, so tripling the premium in order to get your money back (at some point....maybe) doesn't really make financial sense to me. Instead, term should be viewed as a cost to the client...nothing more.

 

[senior-advisor-indiana]

The ROP's I have looked at only doubles the premium.