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Very popular plan today
Called - Co signed College Loan Plan. Or Mortgaged the house for Med School Plan
Do GA/MGA/IMO/FMO draft cover letters
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Very popular plan today
Called - Co signed College Loan Plan. Or Mortgaged the house for Med School Plan
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MoneyNirvana
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You are on to something!!!!!
For a 24 yr old a 40Y Term at $600/yr after halfway (20 yrs) is beautiful. Level term premium. Love it.
- 24,967
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MoneyNirvana
Super Genius
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I m disappointed my insurance company wont budge in issuing a $500k policy for children.
Buying a home, starting a business and getting married plus college debt & income replacement are milestones for young children age 20-28 yrs old.
I wonder explaining this after having already applied makes sense anymore.
No one helped getting my original question answered? what say you?
Should a GA be helping draft a cover letter for this exact situation?
Buying a home, starting a business and getting married plus college debt & income replacement are milestones for young children age 20-28 yrs old.
I wonder explaining this after having already applied makes sense anymore.
No one helped getting my original question answered? what say you?
Should a GA be helping draft a cover letter for this exact situation?
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The issue as I recall, was parents buying coverage on their children. Not on the adult children buying their own coverage as adults. Adults buying homes, raising families and such. Big difference. That is one of the reasons companies give such high income multiples to younger adults.
Should? Sure or have a resource to guide you However, if the IMO writes it it is going to be and sound like bullshit. Because they do not know or even spoken to this prospect. You are the person who has a relationship and some intimate knowledge of the situation. They should be able to guide you and give you a format or track but it should come from you.
IMohsoHO
I think you’re on your own. First, no one can explain your clients situation better than you. Second, the only reason you would seek intervention from an IMO, FMO, GA is because of influence they may have with the carrier and gaining preferential favors. They certainly cannot explain it better.
An IMO can’t relay to the carrier the circumstances of your client any clearer than you already have to us. Your clients have children who are still in college; who all have part-time income of approximately $6,000 annually. Yes, they may someday be married, have children of their own, start their own businesses, and have a need for income replacement. However, you are speculating on their entire future upon graduation. The insurance company is telling you, they are not there yet. In effect, they are saying, “No kid, who only works p.t.; whose income is barely $6,000 annually; with zero net worth, is worth a half million dollars. Wait until they obtain full-time jobs, then we will reconsider.”
Think about it this way, if the parents decide to have another baby, aside from age and $6,000/yr in income, what would be the justification for the insurance company granting the older siblings $500,000 of coverage, yet denying the newborn the same amount? I’m certain everyone’s expectations of the newborn’s future is just as promising as it is for those scheduled to graduate within the next 3 years. Why expect anything less, since we’re speculating? By the way, should the death of a newborn be less painful than the death of the parent’s first born, or any other child? Who has the right to make that call?
If your argument is that $500,000 of coverage on each student-child is necessary to protect the parents financial commitment towards their education, the insurance company is suggesting that they do not hedge college funding strategies of this sort.
Unless you’re looking for someone to pull some strings for you, my recommendation is you write the letter yourself. Quite frankly, you’re the best person to fight for your client and the only one who can convince the carrier to buy your rationale. You may want to reconsider including the part about who may or may not be the policies beneficiaries. I do not believe that statement would add value to your argument. The insurer is well aware that the policy owner can change the beneficiary at will, unless you’re talking about setting up an irrevocable life insurance trust at a later date. That’s a whole other discussion.
Best of luck to you!
For a term policy, yes that premium will be nice once they get way out there. However convertibility is an issue also, I hope you are keeping that in mind and having that conversation with them today. Its likely they will outlive that 40yr term, but they may become uninsurable along the way.
Personally, I'd probably do a $500k 20yr term with a fully convertible product (with a range of good perm products) and it would cost 1/3 of that premium today. In fact, I just did on a 23yo.
imho
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Did you write that on a 23yr old with no income?For a term policy, yes that premium will be nice once they get way out there. However convertibility is an issue also, I hope you are keeping that in mind and having that conversation with them today. Its likely they will outlive that 40yr term, but they may become uninsurable along the way.
Personally, I'd probably do a $500k 20yr term with a fully convertible product (with a range of good perm products) and it would cost 1/3 of that premium today. In fact, I just did on a 23yo.
yes
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MoneyNirvana
Super Genius
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i also am thinking forward in predicting that within a few years their salary/income will rise and if they have this as an existing policy than they will only qualify for so much based on income.
eg. The children graduate and have a job paying $50,000 annually and have enough in savings to want a permanent policy in the next five years.
This 500k term policy (if approved) would limit their abilities to get a higher death benefit permanent life policy down the road as at age 30 with 20x income minus existing policy is all an underwriter would qualify the applicant at near age 30 or less.
eg. The children graduate and have a job paying $50,000 annually and have enough in savings to want a permanent policy in the next five years.
This 500k term policy (if approved) would limit their abilities to get a higher death benefit permanent life policy down the road as at age 30 with 20x income minus existing policy is all an underwriter would qualify the applicant at near age 30 or less.
