First of all - we need a Term Insurance sub-forum . . .

[johntrice]

Allen- that's great advice. I never wrote a spouse on the same policy and with a 50% divorce rate, I never will.

 

[myinsurebiz]

You are right. Term is so different than what it was thirty years ago when A.L. Williams was pushing "buy term and invest the difference." What most don't remember was that A.L. Williams was targeting Whole Life via replacement.

Today, term has changed so much it's hard to find a fit for Whole Life unless you're selling Final Expense. I know there are some WL agents that disagree but with IULs, GULs and GIULs being so strong and term covering so many new areas (like living benefits) where's the niche outside final expense? Maybe infinite banking?

That's why agents that sell life really need to be experts in term in addition to our life plans.
Don't get me wrong, I have a whole life plan on myself but I bought it when I was 22 years old. The thought then was carry a whole life to cover medical deductibles and co-payments. My deductible back then was $250 so my WL cash value would cover that after just a few years.

Today, we've got term with living benefits that will cover more expenses than my old WL, term with return of premium and straight death benefit only, child riders, waivers for disability, AD&D riders and the list goes on.

Plus it's hard to keep up with guaranteed issue term, simplified, non-med and fully underwritten.

A term life forum is probably a great idea!

Term to me is an affordable vehicle for someone to access a large Face with / without Living Benefits for pennies on the $$ . . . 25 to 55 is my target . . . Small Business Owners & Employees too . . .

If someone gets a 20 - 30 year term and their savings are on track to have cash when they out live the Term - great. If not - get with the Savings. They can always convert some or all to Permanent protection if needed.

 

[myinsurebiz]

Not a fan of adding a spouse as a rider. For several reasons, I believe it is best to have the spouse own their own stand alone term policy.

1. If base insured dies, the spousal term rider might be convertible to WL, but the person may not be ready to pay for the WL premiums. I have seen many spousal riders end, like most riders do, when the base policy ends.

2. If they get divorced, many term riders cannot be peeled off to their own term coverage without new underwriting & new older age. Unlike retirement laws that allow for QDRO to roll over your share of retirement funds to your own account, there are no laws that force insurance carriers to spin off the coverage for the spouse that is merely a rider. Furthermore, many states actually void the ability legally for a spouse to own coverage on a ex-spouse or be the beneficiary of proceeds. By contract in many cases, the base insured policy owner owns the rider. But with a standard default divorce decree, that right ends on the date of divorce.

So, for these reasons, and the fact that the primary carrier I work with has the same exact cost for a stand alone term as the cost of the rider, I just feel strongly the spousal rider has too many pitfalls in many cases & carriers that I have seen.

Thanks for the advice on the Spouse Rider. I ran some quotes and there weren't but a few bucks different.

How would you handle Child Riders? Or - get a stand alone MoO child wl policy?

 

[bluezebra48]

agreed, separate policies for everyone, another reason is they can lapse one if money gets tight and keep the breadwinner. And, I always use MOO for kids policies.

 

[Tahoe Ray]

Must be different for Med Supps. I've only done a few e-apps, but you couldn't submit it if anything was missing.

Sounds like Sagicor's gonna fit nicely on your desk.

You can't submit a NIGO eApp for life either...or DI or LTC.

At least not that I'm aware of...

 

[Allen Trent]

How would you handle Child Riders? Or - get a stand alone MoO child wl policy?

If they can afford stand alone kids WL policies without sacrificing coverage on parents, great. That would be best option. But, normally you can't buy stand alone term poicies for kids under age 18 or so.

If they have limited funds & can't afford WL or all their current & future kids or they have 2,3 or say 6 kids, adding the Child Rider is great as it is a small flat charge. It usually covers all current living kids that are insurable & all future children born or adopted without underwriting.

So, the more kids in a family, the better deal the flat child rider costs. All these features along with the fact that many child riders allow conversion to WL up to 5x the rider amount at age 20-25 make the Child Rider a great way to provide inexpensive coverage & some guaranteed future WL insurability. A 20k child rider would many times allow them to convert to 100k WL when they are 20-25 yrs old.

In our race to be cheapest in term, too many agents fail to add the child rider as it adds more paperwork, longer phone interviews & adds very little premium & commission. Same can be said for Disability Premium waiver rider that is not sold nearly enough any longer.

 

[rousemark]

Term to me is an affordable vehicle for someone to access a large Face with / without Living Benefits for pennies on the $$ . . . 25 to 55 is my target . . . Small Business Owners & Employees too . . .

If someone gets a 20 - 30 year term and their savings are on track to have cash when they out live the Term - great. If not - get with the Savings. They can always convert some or all to Permanent protection if needed.

I am not a big fan of life insurance with living benefit riders. They buy a certain death benefit because that is what their family will need upon their death. If they have to accelerate their DB because of the expenses of an illness, then their family is going to come up short at the time of death. Much better to have a separate CI policy, but that may mean more cost.

However, If you are going to use companies that have "free" living benefit riders, you need to sure you understand how most of them work.. There is not a set amount payable at the time of the chronic or critical illness. When the insured elects to accelerate the death benefit, the payment is based upon how the covered even impact the insureds mortality. For example, A client has a $500K policy and is diagnosed with stage IV pancreatic cancer and they elect to accelerate $250K.. The company may offer $200K for the surrender of the $250K DB... That same person diagnosed with stage I prostate cancer may only be offered $50K to surrender $250K DB because their mortality is not severely decreased.

A product that has a premium for the accelerated benefits can create more security for the client. With them you know exactly what will be paid upon the occurrence of a covered event. (but they still reduce the remaining DB)

 

[myinsurebiz]

If they can afford stand alone kids WL policies without sacrificing coverage on parents, great. That would be best option. But, normally you can't buy stand alone term poicies for kids under age 18 or so.

If they have limited funds & can't afford WL or all their current & future kids or they have 2,3 or say 6 kids, adding the Child Rider is great as it is a small flat charge. It usually covers all current living kids that are insurable & all future children born or adopted without underwriting.

So, the more kids in a family, the better deal the flat child rider costs. All these features along with the fact that many child riders allow conversion to WL up to 5x the rider amount at age 20-25 make the Child Rider a great way to provide inexpensive coverage & some guaranteed future WL insurability. A 20k child rider would many times allow them to convert to 100k WL when they are 20-25 yrs old.

In our race to be cheapest in term, too many agents fail to add the child rider as it adds more paperwork, longer phone interviews & adds very little premium & commission. Same can be said for Disability Premium waiver rider that is not sold nearly enough any longer.

What about a MoO Childrens Whole Life? Cheap and has several conversion options.

I like Assurity's products and their many different Riders. I wish their Living Benefits were stronger.

 

[myinsurebiz]

I am not a big fan of life insurance with living benefit riders. They buy a certain death benefit because that is what their family will need upon their death. If they have to accelerate their DB because of the expenses of an illness, then their family is going to come up short at the time of death. Much better to have a separate CI policy, but that may mean more cost.

However, If you are going to use companies that have "free" living benefit riders, you need to sure you understand how most of them work.. There is not a set amount payable at the time of the chronic or critical illness. When the insured elects to accelerate the death benefit, the payment is based upon how the covered even impact the insureds mortality. For example, A client has a $500K policy and is diagnosed with stage IV pancreatic cancer and they elect to accelerate $250K.. The company may offer $200K for the surrender of the $250K DB... That same person diagnosed with stage I prostate cancer may only be offered $50K to surrender $250K DB because their mortality is not severely decreased.

A product that has a premium for the accelerated benefits can create more security for the client. With them you know exactly what will be paid upon the occurrence of a covered event. (but they still reduce the remaining DB)

I'm learning a lot about the Living Benefits. I agree with you on the delusion of the Death Benefit. I think the riders that are free do that. I saw one carriers LB that didn't do that - but, the client paid for the rider vs free . . .

I'm doing a webinar tomorrow on stand alone CI, STD, LTD products. I'm going to research the rates together on a life rail and as stand alone and see what's up.

 

[WinoBlues]

Not a fan of adding a spouse as a rider. For several reasons, I believe it is best to have the spouse own their own stand alone term policy.

1. If base insured dies, the spousal term rider might be convertible to WL, but the person may not be ready to pay for the WL premiums. I have seen many spousal riders end, like most riders do, when the base policy ends.

2. If they get divorced, many term riders cannot be peeled off to their own term coverage without new underwriting & new older age. Unlike retirement laws that allow for QDRO to roll over your share of retirement funds to your own account, there are no laws that force insurance carriers to spin off the coverage for the spouse that is merely a rider. Furthermore, many states actually void the ability legally for a spouse to own coverage on a ex-spouse or be the beneficiary of proceeds. By contract in many cases, the base insured policy owner owns the rider. But with a standard default divorce decree, that right ends on the date of divorce.

So, for these reasons, and the fact that the primary carrier I work with has the same exact cost for a stand alone term as the cost of the rider, I just feel strongly the spousal rider has too many pitfalls in many cases & carriers that I have seen.

Agreed. Another reason - inherent riders may only cover the base insured. Such as accelerated benefit rider. Having paid that out several times it is always an important part of my presentation.