Forethought Chargebacks

[bourbonlegend]

If I'm beating a deadhorse than I'm sorry but I just saw this =

Year 1 commissions will be charged back 100% at any time coverage is not taken, voided, or coverage is converted and first year commission is​

paid on the new coverage, or if non-accidental death occurs during the first policy year on a graded death benefit or single premium coverage.

I'm pretty sure that Motorist has a clause like this as well. Are there any other companies with "shady" chargeback policies that we should know about?

While it is my policy to write "good business", sometimes the unforeseen can happen the your client WILL drop their policies. This doesn't seem fair and I would like to avoid all companies that have these questionable methods of doing business.

 

[bourbonlegend]

The way it reads, an agent will be exposed to 100% chargeback even if contract is "as earned". I didn't sign because I thought it was "SHADY". They seem pretty similar to other companies with the exception of the free "grand kid" coverage (only pays one time $5000) and the fact that agents get totally screwed if a client loses a job and can't pay premiums.

 

[davidg]

They will not chargeback if commission is as earned.

 

[Newby]

They will not chargeback if commission is as earned.

Yes they will.

 

[theinsuranceman]

If I'm beating a deadhorse than I'm sorry but I just saw this =

Year 1 commissions will be charged back 100% at any time coverage is not taken, voided, or coverage is converted and first year commission is​

paid on the new coverage, or if non-accidental death occurs during the first policy year on a graded death benefit or single premium coverage.

I'm pretty sure that Motorist has a clause like this as well. Are there any other companies with "shady" chargeback policies that we should know about?

While it is my policy to write "good business", sometimes the unforeseen can happen the your client WILL drop their policies. This doesn't seem fair and I would like to avoid all companies that have these questionable methods of doing business.

Lincoln Heritage only charges back the UNEARNED commission that was advanced. This is fair for the agent. They do this for ALL their Final Expense policies! And chargebacks NEVER come out of advance commissions, they come out of the UNADVANCED commissions. If you need a contract PM me or call me 252-292-3350...Greg.

 

[Newby]

Lincoln Heritage only charges back the UNEARNED commission that was advanced. This is fair for the agent. They do this for ALL their Final Expense policies! And chargebacks NEVER come out of advance commissions, they come out of the UNADVANCED commissions. If you need a contract PM me or call me 252-292-3350...Greg.

So do MOST life insurance companies. ForeThought is the exception to the rule.

Lincoln Heritage is a good company to have for people with serious health problems.

They are a real bad choice for your MAIN business in my opinion because they are priced way too high and get replaced too easy out in the field by almost any other company.

The fact that Lincoln Heritage sells direct to the public behind their own agent's backs is not the sign of a quality company either. Especially when their own marketing materials play on people's wrong idea that it is "cheaper" to buy without an agent.

And the icing on the cake is that Lincoln Heritage pays lower commission and charges higher prices for leads than almost any other company.

Both ForeThought and Lincoln Heritage have "Funeral Benefit" junk promoted within their products which are of questionable value at best.

 

[VolAgent]

Alright, I'll bite...

What should the company do if they have advanced you first year commissions on a policy and two months in the policyholder stops paying? The person may have lost a job, whatever. What should they do, or even if you are on as earned commissions, what should they do in your opinion?

The way it reads, an agent will be exposed to 100% chargeback even if contract is "as earned". I didn't sign because I thought it was "SHADY". They seem pretty similar to other companies with the exception of the free "grand kid" coverage (only pays one time $5000) and the fact that agents get totally screwed if a client loses a job and can't pay premiums.

 

[G.Gordon]

Alright, I'll bite...

What should the company do if they have advanced you first year commissions on a policy and two months in the policyholder stops paying? The person may have lost a job, whatever. What should they do, or even if you are on as earned commissions, what should they do in your opinion?

What is "right" is already stated in this thread.

It is not right to charge back 100% of the commissions, whether on as earned or advanced, if the policy lapses before the 366th day for "ANY" reason. Most companies charge back only what is not "earned". So if you write a policy and it lapses in the 10th month and you've taken a 12mo advance then you get charged back two months... not the whole 12 as with Forethought. It is even more "wrong" if the policy lapses due to non-payment of premium. They didn't pay the claim and now they didn't pay commissions. They made 100% profit for what was paid.

I think a couple of years ago I saw the Forethought contract and it got recycled. If you read it and sign and then get hit don't feel like a victim.

 

[bourbonlegend]

My ratio of med-sups sold to FE plans sold is something like 100-1. I'll be the first to admit that I need MAJOR work on selling FE.

I am licensed with-

motorist (105%)
lincoln heritage (95%)
united home life (115%)
Marquette National (110%)
Citizens Security (105%)

All of my current business is with Marquette but I'm trying to start putting some with UHL. I have a large med-sup client base that I'd like to mail FE letters to.

I don't know how to best pitch the product and I don't really believe in it that strongly either.