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

[Norwayguy]

CCC says that if they cancel it in year 3, you must give most of their money back. It will give them a higher cash value or rate of return. But the company will have to raise the prices 40 to 50 percent. All companies have to be ccc in 2010.

Those that don't like ROP might like it after CCC. For those clients that cancel early, they would get most of their money back.

I'm not a big fan of ROP now and raising the rates won't make me a bigger fan...it will only make ROP look less attractive next a permenant policy and much more expensive than normal term...Like I mentioned I have only used ROP for those that thought term was throwing there money away...Now maybe I'm wrong and my client will look more favorably on this concept because after a short time they can get most of the money back....I'm just assuming with the premium up 50% from where it is now it would be like selling a table 2 or table 3 to someone right now...some take it some don't.

 

[STIBROKER]

Comatose Consenting Client......

Thanks, but what does CCC stand for?

 

[arnguy]

Forgive my ignorance. CCC is ????

I'm in the same boat with you, Bob. I thought it stood for Civilian Conservation Corps (shades of the New Deal).

 

[somarco]

Dang Arnie. Are you old or what? I read about CCC and WPA in my history book. You must have lived it.

 

[arnguy]

Dang Arnie. Are you old or what? I read about CCC and WPA in my history book. You must have lived it.

Yep, Bob. I did.

P.S. Of course, I was just a little tyke in swaddling clothes.

P.P.S. Still nobody has come up with the meaning of CCC!

 

[somarco]

I was just a little tyke in swaddling clothes

If you tell me you were born in a manger to an unwed mother I may have to barf . . .

 

[moonlightandmargaritas]

Example on a 20 year term, if you cancel it in 5 years, you get nothing. If you cancel it in 19 years you get 90% of you money back. It starts to build cash value after about 10 years.

Another fallacy of this approach....

If I bought 20 year term insurance 19 or 20 years ago and remained healthy, I could have cut my premium in half - twice with the history of term insurance premiums over the last 20 years.

Sounds like a real good deal for the client.

 

[souldeux]

I can help! I can! Look! Loooook!


CCC doesn't stand for anything. It's Actuarial Guideline CCC (AG CCC), and the CCC is Roman numeral notation for 300. Actuarial Guideline 300.

At least, that's the closest thing I can figure out from my readings.

 

[padthaiforlunch]

Just curious...and I don't know the answer since I don't bother with ROPs...If you were forced to take the difference in term and ROP (Same face amount etc...) and invested it tax-deferred at 6%...Which payout would be higher?

I realize most consumers won't do it, but I'm curious.

I ran this recently using sagicor 20-year term. Worked out to 6.128%. Mind you, that is the tax-free rate of return.

I then thought, what if the client was 20 years older today, took the lump-sum and purchased a SPWL.

Next, I took the cost of the 20-year with ROP and put it into a WL policy.

By placing the money in a WL policy, the client has less insurance in the early years, but a higher face amount in 20 years compared to the SPWL.

 

[CHUMPS FROM OXFORD]

Interesting.