Good Income Generator

[moonlightandmargaritas]

Typical Ameri-Life crap. They are legendary here in Florida.

If I'm not mistaken, their "founder" lost his insurance license a few years ago...

Two points I haven't seen yet discussed:

1) NEW policy starts NEW contestible period.

2) Perhaps these seniors could stop paying totally on some of these old policies and have no out of pocket expense at all.

Just another ruse to generate premium/commission. But then again, the guy "moved-up" in Ameri-Life, which is QUITE an accomplishment!

PS-I lived the Pru thing from '91-'94.

 

[CHUMPS FROM OXFORD]

I might add...that generally...all LEGITIMATE companies frown upon using replacement as a systematic method of prospecting...especially to the elderly.

Dimpil1...Can you scan and post on this forum the technique that you are being taught? If you feel it is legitimate, you'll have no problem with that request.

 

[moonlightandmargaritas]

This Ameri-Life is among the most low-budget, bottom feeding agencies that one could find.

Here's what says it all..

"I found something that puts 500-1,000 per week in my pocket."

As opposed to...

"I found something that is valuable for my client. As a result, I enjoy an extra 500-1,000 per week in income."

Big difference.

 

[Newby]

There are limited situations where replacing an older policy is in the best interest of the client. BUT I wouldn't believe there are too many situations where you can take a whole-life policy that is 10 or more years old and cash it out, sell the client a new policy for the remaining insured amount AND have a lower payment and do it with a new WHOLE-LIFE policy.

You aren't using term or UL for the new policy are you?

And you don't want to leave them believing that "dividends" will make future payments for them. I know that was a big part of the Met and Pru lawsuits.

 

[midwestbroker]

Here is my view on this:

I am all about 1035 exchanges. I have met numerous people who have paid up policies that are just sitting in the back of a filing drawer.

If the policy is paid up and they can get past underwriting (where most deals stop), why not just 1035 exchange it for a higher DB? Even if it is a few thousand, this transaction is tax free and cost the client nothing but a few signatures. As long as the benefit is immediate and not graded, they are in the same situation as before but with more DB.

Or, if they have a premium and some CV built up, they can 1035 exchange for the same DB (pending on the amount of CV) and eliminate the premium.

Either case, the policy would have to have been enforce for quite a while to make this attractive for the client.

Now, what dimpl1 is doing I think has its place for people wanting cash back and poss lower premiums, but you are walking a fine line when you start talking about cash back and taxes. Even if you do the over the top full disclosure, it still may come back to bite you.

Question:

When cashing out a WL or UL, how do you know if you will owe taxes on it?

 

[somarco]

When cashing out a WL or UL, how do you know if you will owe taxes on it?

Once you receive the 1099 from your old carrier you will know if you have taxable income.

 

[wilkin]

A policy is "in force" not enforce. (Okay, sorry I just had to mention that)

Question:

When cashing out a WL or UL, how do you know if you will owe taxes on it?

When you cash in a policy, if you get back more than you put in, it is taxed.

 

[SMTM]

The only case that taxes would have to be paid is when the cash value exceeds the amount of premiums paid in. So basically don't cash out more than the have paid in. Always be careful with any UL or VUL policies. These can accumulate cash value faster and the client can end up with a tab for any gains that resulted from the policy.

In a nutshell:

1) You can cash out policy and write a new one if the client understands that they will still be paying a premium, but will have some cash in their pocket now. Never cancel a policy until the new one is issued and in force.

2) Sell them a SPWL by doing a 1035 with the CV. No more premiums and they still will have some death benefit, but lower. Works great for older people with larger policies that really don't need all that coverage anymore.

3) You can always roll that CV into an annuity.

 

[somarco]

taxes would have to be paid is when the cash value exceeds the amount of premiums paid

Picking nits . . .

The correct response is when the SURRENDER VALUE exceeds the premiums paid. Internal cash values are still protected against taxation.

Surrender value includes policy cash values and (sometimes) a termination dividend.

 

[arnguy]

Where is James, our resident guru of life insurance? I would like to see his opinion of this scheme inasmuch as I consider him to be a LI expert.