Big R.O.P. Changes Are Coming Soon!

[Mark]

Guideline CCC on R.O.P. will take effect in 2010.
The change will give more back to the client. They will get a higher return on their cash value and be able to cash it in sooner.

All R.O.P. products must make this change by the beginning of 2010. Some companies will do it much sooner then 2010.

The price of R.O.P. will go up anywhere from 40% to 50%

I want to make sure you know about this change. It will make R.O.P. better for the client, but the client is really going to pay a lot more for it.

All of the insurance companies are talking about it and not many agents know about this change.

 

[dgoldenz]

It's easy to give more cash value back when you're charging a 50% higher premium.....but if the premiums are too high, nobody will buy it. Wouldn't surprise me to see even more companies just dump ROP altogether.

 

[moonlightandmargaritas]

The price of R.O.P. will go up anywhere from 40% to 50%

It will make R.O.P. better for the client, but the client is really going to pay a lot more for it.

ROP isn't better for the client. It's a sucker bet. Hopefully this will make it go away.

 

[ABC]

I think ROP is good play for clients.

The word I am hearing is the carriers are going to be dropping all together.

 

[dgoldenz]

ROP is a bad play for the clients because most of them will drop the policy in favor of a new one before they ever reach the full term...

 

[ABC]

ROP is a bad play for the clients because most of them will drop the policy in favor of a new one before they ever reach the full term...

All the ROP I have sold have stayed on the books.

Are you guys saying pure term is the better route, Universal life, whole life explain to me why its a bad play.

Thanks

 

[dgoldenz]

All the ROP I have sold have stayed on the books.

Are you guys saying pure term is the better route, Universal life, whole life explain to me why its a bad play.

Thanks

I just explained it....has your ROP policies stayed on the books the full 20 or 30 years and actually been paid back to the client, or only a few years since you sold it? Usually the policies will fall off the books after 10-15 years because people get towards the age where if they don't replace the policy now, it will be much, much more expensive to replace it at the end of the 20 or 30 year term. They could also be table rated or declined by that time and pay through the nose instead of locking in at a younger age just because they wanted the money back.

 

[JMO Fan]

Some regulators want CCC to kill ROP. Some don't. ROP is a bit of a gimmick, can be OK for some people (and might help them keep more insurance longer).

CCC will surely make current forms of ROP more expensive. Some carriers are revising their ROP so it avoids CCC. It's hard to tell whether the revised ROP will be more expensive.

 

[ABC]

I just explained it....has your ROP policies stayed on the books the full 20 or 30 years and actually been paid back to the client, or only a few years since you sold it? Usually the policies will fall off the books after 10-15 years because people get towards the age where if they don't replace the policy now, it will be much, much more expensive to replace it at the end of the 20 or 30 year term. They could also be table rated or declined by that time and pay through the nose instead of locking in at a younger age just because they wanted the money back.

So what are you selling them?

With interest rates so low how can you sell any permanent product and talk about cash value?

 

[Justin Bilyj]

Would ROP premiums be competitive with UW??