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

[myinsurebiz]

One last thing about Return of Premium options, I love them and hate'em.

ROP is pretty good if the owner keeps the policy for the entire term period; however, many plans return nothing (or very little) if the policy isn't kept to termination. Since most term plans are canceled before the end of the term and many clients forget that they have this rider, clients can really mess up.

Traditional Term terminate quite a bit too - at least with ROP - they have the chance to recover money spent . . .

 

[rousemark]

I'm looking forward to the day.

Another question - for my family to carry on when I die - say there is a 30 year ROP. Client is going to receive say $20k in returned premium. With Assurity - can they elect a RPU whole life instead? If so - does the agent earn off that?

Don't know of any company that pays a commission to the agent when a client chooses the Reduced Paid Up Insurance option. I used to think all companies had RPU available on their ROP term but CLU didn't..

 

[myinsurebiz]

Don't know of any company that pays a commission to the agent when a client chooses the Reduced Paid Up Insurance option. I used to think all companies had RPU available on their ROP term but CLU didn't..

Neither do many others.

Guess if client is healthy - they could move that ROP earned over to a Single Payment WL or Annuity . . .

 

[Allen Trent]

With Assurity - can they elect a RPU whole life instead? If so - does the agent earn off that?

Many ROP at the end of the term offer either a lump sum cash or an RPU. However, don't confuse it with RPU WL.

If the ROP term still has a conversion benefit at the end of the term or the client is insurable, the client would normally be better off to convert to a SPWL or buy a SPWL with underwriting & fund it with the ROP proceeds.

The performance of most dividend paying spwl would be far superior to an RPU term at the end of an ROP. The RPU generally doesnt function like an RPU WL or SPWL. I believe only the uninsurable should elect the RPU term at the end as it is likely better than cash

 

[myinsurebiz]

Many ROP at the end of the term offer either a lump sum cash or an RPU. However, don't confuse it with RPU WL.

If the ROP term still has a conversion benefit at the end of the term or the client is insurable, the client would normally be better off to convert to a SPWL or buy a SPWL with underwriting & fund it with the ROP proceeds.

The performance of most dividend paying spwl would be far superior to an RPU term at the end of an ROP. The RPU generally doesnt function like an RPU WL or SPWL. I believe only the uninsurable should elect the RPU term at the end as it is likely better than cash

I called and this was the short answer.

Once the Term period has been reached - the client is mailed a check for the ROP. They then can use that to buy into a SPWL - but, no guaranteed insurability.

Conversion - client can convert some or all of the Term to Whole Life with guaranteed insurability. If they don't convert all - then they lose the ROP on the part they converted. If they convert all - then they receive 100% of the earned ROP up to the point of conversion.

So - if someone has plans on converting - I'm not sure I could advise them to get a ROP policy.

Thoughts?

 

[GreenSky]

My thought is we need a new subforum called "I'm Tom and need you to help with every case I can think of."

Aren't you the genius who told us all how easy insurance was? It's easy if the agent has an IQ higher than you. Maybe triple digits.

Rick
(please respond by changing my name to *ick because apparently you get off on that)

 

[somarco]

hard to find a fit for Whole Life unless you're selling Final Expense.

NQ deferred comp?

Estate planning?

 

[myinsurebiz]

My thought is we need a new subforum called "I'm Tom and need you to help with every case I can think of."

P*ick

Ha *ick - there wasn't a "case", just wanting a full understanding. I can't help my client if I'm not 100% sure of the product. Can't teach something that I don't know.

You'd be surprised how many veteran Agents didn't know the answer. Heck a few of the Reps at the Carriers didn't even know how conversion on a ROP Term policy works . . .

#DontHateRelate

 

[goillini52]

Ha *ick - there wasn't a "case", just wanting a full understanding. I can't help my client if I'm not 100% sure of the product. Can't teach something that I don't know.

You'd be surprised how many veteran Agents didn't know the answer. Heck a few of the Reps at the Carriers didn't even know how conversion on a ROP Term policy works . . .

#DontHateRelate

Tom, would you be willing to teach *ick what you've learned about ROP Term?

 

[myinsurebiz]

Don't know of any company that pays a commission to the agent when a client chooses the Reduced Paid Up Insurance option. I used to think all companies had RPU available on their ROP term but CLU didn't..

What about when they convert the Term to Permanent?