Do GA/MGA/IMO/FMO draft cover letters

[titeye]

Having that amount of term coverage on the children does seem like a sound strategy. If one of the children predecease their parents, what’s the benefit to the 2 remaining children? Nothing. Their education is still protected by the insured parents, not their deceased sibling.
Insurance was created to indemnify and make one whole, not prosper. With your strategy, the parents estate and net worth would increase significantly if either one of the children predeceases them. God forbid all 3 children predecease the parents!
You mentioned that you recommended this strategy because the parents are rich. The children are not, and therefore have nothing to protect. Even if they did, term insurance is an ineffective estate planning tool. Recommending permanent policies on all 3 children would have flown right through underwriting. Both UL and VUL would have made even more sense: flexibility to increase and decrease face amounts, flexibility to increase/decrease premium payments, interest on cash value for growth; and, this would have made a lot of sense to the already wealthy parents. I can definitely see why underwriting shut this down.
Why not reconsider recommending a permanent policy?

 

[titeye]

* that amount of term DOES NOT.

 

[pfg1]

Sounds like you are on the right track. Who are you doing a 40yr term with?

I always submit a cover letter in advance if I know something will throw up a red flag. Just helps. Also like Wino said, it helps to have companies that you know you can work with.
The limit on the father might be because his income only justifies a certain total amount of coverage. Some companies are strict there, others lenient. Again, if you can justify why they need more - do it.

 

[pfg1]

Having that amount of term coverage on the children does seem like a sound strategy. If one of the children predecease their parents, what’s the benefit to the 2 remaining children? Nothing. Their education is still protected by the insured parents, not their deceased sibling.
Insurance was created to indemnify and make one whole, not prosper. With your strategy, the parents estate and net worth would increase significantly if either one of the children predeceases them. God forbid all 3 children predecease the parents!
You mentioned that you recommended this strategy because the parents are rich. The children are not, and therefore have nothing to protect. Even if they did, term insurance is an ineffective estate planning tool. Recommending permanent policies on all 3 children would have flown right through underwriting. Both UL and VUL would have made even more sense: flexibility to increase and decrease face amounts, flexibility to increase/decrease premium payments, interest on cash value for growth; and, this would have made a lot of sense to the already wealthy parents. I can definitely see why underwriting shut this down.
Why not reconsider recommending a permanent policy?

I typically do perm on my child policies. Young adults - term can be fine as long as it is convertible to good products and we have that conversation going in. I'd say a better amount to apply for (of term) is more like $250k...probably get no pushback at all. Parents are on the hook for financing them for college, supporting them, etc. If one dies, the ins makes the parents whole...and covers them likely above what they owe on the child. The extra helps with suffering, funeral costs etc. I've seen families damn near lose everything after losing a child, they shut down - can't work or even function. That is what insurance is for.

 

[somarco]

I've seen families damn near lose everything after losing a child, they shut down - can't work or even function. That is what insurance is for.

2

Thank you for pointing that out.

The "term-ites" say get enough to cover burial on kids and that is all. Single minded fools say life insurance is for paying debts and replacing income.

Nothing else matters. Just another reason for agent to pad their commissions.

I know a few parents who have lost children, mostly to car accidents. Kids 16 - 20 or so killed.

Parents devastated.

One mother cried every day for almost a year. So loud neighbors could hear her. Then she committed suicide. Husband/father had to deal with TWO losses in a year.

Burying a parent or spouse is one thing.

Burying a child is devastating. Thankfully I have not had to deal with that but know a few parents who have and have witnessed first hand how grief can consume you.

Having $100k or more on a kid to allow the parents to bury their child with dignity and allow them the luxury of NOT having to go to work the very next day is a GIFT.

I have grieved for days over the loss of a dog. Can't even imagine how I would do if one of my (adult) children died.

My business is such that I can take off for 3 months, 6 months or longer to grieve.

Most parents don't have that luxury.

If you as a life insurance agent are not asking the question "How much time do you need to grieve the loss of your child?" in your presentation you are missing the purpose of child life insurance.

It's not so much for the child as it is the PARENTS who survive the loss.

 

[titeye]

I typically do perm on my child policies. Young adults - term can be fine as long as it is convertible to good products and we have that conversation going in. I'd say a better amount to apply for (of term) is more like $250k...probably get no pushback at all. Parents are on the hook for financing them for college, supporting them, etc. If one dies, the ins makes the parents whole...and covers them likely above what they owe on the child. The extra helps with suffering, funeral costs etc. I've seen families damn near lose everything after losing a child, they shut down - can't work or even function. That is what insurance is for.

This is the first I’ve heard of parents being obligated to continue education expenses on a deceased child. Ordinarily, such a tragedy is what releases them from it; yet, they can still apply the deceased child’s education fund(s) towards the education expenses of surviving children and not be penalized.
What is the name of that college plan?

 

[Tahoe Ray]

This is the first I’ve heard of parents being obligated to continue education expenses on a deceased child. Ordinarily, such a tragedy is what releases them from it; yet, they can still apply the deceased child’s education fund(s) towards the education expenses of surviving children and not be penalized.
What is the name of that college plan?

I would guess that he's talking about private college loans which are not dischargable on death.

 

[titeye]

I would guess that he's talking about private college loans which are not dischargable on death.

Ok

 

[WinoBlues]

O

Sounds like you are on the right track. Who are you doing a 40yr term with?

I always submit a cover letter in advance if I know something will throw up a red flag. Just helps. Also like Wino said, it helps to have companies that you know you can work with.
The limit on the father might be because his income only justifies a certain total amount of coverage. Some companies are strict there, others lenient. Again, if you can justify why they need more - do it.

Re: 40 yr term my guess is Banner.

 

[WinoBlues]

2

Thank you for pointing that out.

The "term-ites" say get enough to cover burial on kids and that is all. Single minded fools say life insurance is for paying debts and replacing income.

Nothing else matters. Just another reason for agent to pad their commissions.

I know a few parents who have lost children, mostly to car accidents. Kids 16 - 20 or so killed.

Parents devastated.

One mother cried every day for almost a year. So loud neighbors could hear her. Then she committed suicide. Husband/father had to deal with TWO losses in a year.

Burying a parent or spouse is one thing.

Burying a child is devastating. Thankfully I have not had to deal with that but know a few parents who have and have witnessed first hand how grief can consume you.

Having $100k or more on a kid to allow the parents to bury their child with dignity and allow them the luxury of NOT having to go to work the very next day is a GIFT.

I have grieved for days over the loss of a dog. Can't even imagine how I would do if one of my (adult) children died.

My business is such that I can take off for 3 months, 6 months or longer to grieve.

Most parents don't have that luxury.

If you as a life insurance agent are not asking the question "How much time do you need to grieve the loss of your child?" in your presentation you are missing the purpose of child life insurance.

It's not so much for the child as it is the PARENTS who survive the loss.