FE Negatives Vs. Traditional Life Insurance? Keeping a Happy Client?

[josephS]

One thing I am worried about since we are building a client base with renewals. What really happens when a client passes on? I hear that these FE policies can take months to actually pay out. Is this true?

Also as seniors get older and more forgetful how do you help them keep track of payments so their policy doesn't cancel other than connecting a bank account for payment?

I guess Im just trying to figure out What are some major problems you found with FE companies, their actual product, and keeping your clients happy?

I read this in an article and was concerned. Thanks! :

"Not picking on any one final expense company, in general this no lapse product will be 1/3 to 1/5 of the cost per thousand of a final expense or burial policy if you qualify for standard rates, which most of us do. So for the convenience of not answering several health questions and not taking an exam you are going to pay 3 to 5 times more than you need to or you will get comparably less insurance for the same money."

 

[WinoBlues]

I come from the traditional side but write a few SIWL policies now also.

>>I hear that these FE policies can take months to actually pay out. Is this true?

A clients sister died early this morning. We faxed the assignment to the company late this morning. Checks went out this afternoon. Could have been overnighted if the client wanted to pay the overnight. Edit: FE policy about 10 years old.

I have never had a policy not pay traditional or FE. Slowest contestable claims were traditional. Something like 6 month.

>>Also as seniors get older and more forgetful how do you help them keep track of payments so their policy doesn't cancel other than connecting a bank account for payment?

Most of my non business clients are PAC. Business tend to be Quarterly or Annual. Some of my clients have been with me 20 plus years. We have changed them to PAC from direct pays.

>>... What are some major problems you found with FE companies,...

I do not see a problem with the companies or the products as much as the agents selling the product. The products are just a tool, a solution to a problem.

>>....no lapse product will be 1/3 to 1/5 of the cost per thousand of a final expense... if you qualify for standard rates, which most of us do. ...... convenience of not answering several health questions and not taking an exam you are going to pay 3 to 5 times more......

Yes and no. Depends on the client. Just like there are bad agents that put healthy young people in SIWL, there are bad agents that put people into GULs knowing they are going to lapse it. Usually a "more bang for the buck" replacement.

Many of my clients were healthy 35-55 year olds when I wrote 20 year terms on them 20 years ago. Damn, that went fast! Now they are FE aged.

I sell Life Insurance. Not FE or Traditional. Life Insurance. Siting on my desk are 3 GULs and 3 SIWL apps. Ask any of these 6 if the bought final expense or traditional life insurance and will probably say I do not know. And hopefully call me.

This is posted in the FE forum so you will get mostly replies from FE agents. Ask the same question in the Life Insurance forum and you will get different answers.

Can you link the article for us?

Lee

One thing I am worried about since we are building a client base with renewals. What really happens when a client passes on? I hear that these FE policies can take months to actually pay out. Is this true?

Also as seniors get older and more forgetful how do you help them keep track of payments so their policy doesn't cancel other than connecting a bank account for payment?

I guess Im just trying to figure out What are some major problems you found with FE companies, their actual product, and keeping your clients happy?

I read this in an article and was concerned. Thanks! :

"Not picking on any one final expense company, in general this no lapse product will be 1/3 to 1/5 of the cost per thousand of a final expense or burial policy if you qualify for standard rates, which most of us do. So for the convenience of not answering several health questions and not taking an exam you are going to pay 3 to 5 times more than you need to or you will get comparably less insurance for the same money."

 

[Pete Cormie]

I come from the traditional side but write a few SIWL policies now also.

>>I hear that these FE policies can take months to actually pay out. Is this true?

A clients sister died early this morning. We faxed the assignment to the company late this morning. Checks went out this afternoon. Could have been overnighted if the client wanted to pay the overnight.

I have never had a policy not pay traditional or FE. Slowest contestable claims were traditional. Something like 6 month.

>>Also as seniors get older and more forgetful how do you help them keep track of payments so their policy doesn't cancel other than connecting a bank account for payment?

Most of my non business clients are PAC. Business tend to be Quarterly or Annual. Some of my clients have been with me 20 plus years. We have changed them to PAC from direct pays.

>>... What are some major problems you found with FE companies,...

I do not see a problem with the companies or the products as much as the agents selling the product. The products are just a tool, a solution to a problem.

>>....no lapse product will be 1/3 to 1/5 of the cost per thousand of a final expense... if you qualify for standard rates, which most of us do. ...... convenience of not answering several health questions and not taking an exam you are going to pay 3 to 5 times more......

Yes and no. Depends on the client. Just like there are bad agents that put healthy young people in SIWL, there are bad agents that put people into GULs knowing they are going to lapse it. Usually a "more bang for the buck" replacement.

Many of my clients were healthy 35-55 year olds when I wrote 20 year terms on them 20 years ago. Damn, that went fast! Now they are FE aged.

I sell Life Insurance. Not FE or Traditional. Life Insurance. Siting on my desk are 3 GULs and 3 SIWL apps. Ask any of these 6 if the bought final expense or traditional life insurance and will probably say I do not know. And hopefully call me.

This is posted in the FE forum so you will get mostly replies from FE agents. Ask the same question in the Life Insurance forum and you will get different answers.

Can you link the article for us?

Lee

Great exposition Lee. +1 to all you wrote.

 

[josephS]

Thanks for the reply. I am interested in getting into selling FE, but just wanted to make sure I was selling a positive product that wasn't hurting people in the end.


Cant post link since I havent posted 10 or more yet.


Thanks!

 

[hammerken]

My business is similar to Lee's. I have never had a FE company drag their heels when paying claims. It has always been a smooth process. The only claims issues I have ever run into have been on Variable Policies, specifically VAs.

 

[xrac]

Thanks for the reply. I am interested in getting into selling FE, but just wanted to make sure I was selling a positive product that wasn't hurting people in the end.

Cant post link since I havent posted 10 or more yet.

Thanks!

My though is that any coverage is better than no coverage.