Guaranteed Issue FE at great rates

[Newby]

Newby:
Time to remind everyone of the Guaranteed Issue Final Expense product available from Cincinnati Equitable Life.

Extremely low rates. Everyone age 50-80 is accepted. No rate up for smokers.

74 year old male smoker with insulin dependent diabetes, heart attack last month and Crohns Disease can get $10,000 for $81.78 per month. 3-year ROP.

How? Am. Amicable is 133.55. Why can Cincinnatti Equitable be so low? With these rates, will they stay in business or do what many companies have done: withdraw the product.

What are the commissions?

Street is 60% with 6.8% renewals.

The only other products I know of like it are Presidential which has higher premiums and 50% commission and Americo which is way, way higher premiums but much better commissions.

What's great about this product is when you have a very price sensitive client who is not perfect heath (especially smokers) you can sell it. It's not the product you go to for people in good health or if they aren't concerned with the amount of premium they pay (are there any people like that?)

 

[SportsNut]

Street is 60% with 6.8% renewals.

The only other products I know of like it are Presidential which has higher premiums and 50% commission and Americo which is way, way higher premiums but much better commissions.

What's great about this product is when you have a very price sensitive client who is not perfect heath (especially smokers) you can sell it. It's not the product you go to for people in good health or if they aren't concerned with the amount of premium they pay (are there any people like that?)

Newb:

What are your thoughts on the overall strength and stability of CELIC? Downgraded by AM Best in Jan 08, to B+. I realize they are into consolidation of businesses, both in MI and PA, which PA has been ceased. Plus having stopped offering property and casualty ins in 07, and are solely a life ins company following that move, so there is some natural contraction involved.

I am also aware that the company is/was largely owned by one of Cinti's strongest ins names, Alpaugh. This certainly can't hurt.

What is your due diligence on the company as well as thoughts looking ahead...? You obviously are comfortable with them, but why?

 

[Newby]

Newb:

What are your thoughts on the overall strength and stability of CELIC? Downgraded by AM Best in Jan 08, to B+. I realize they are into consolidation of businesses, both in MI and PA, which PA has been ceased. Plus having stopped offering property and casualty ins in 07, and are solely a life ins company following that move, so there is some natural contraction involved.

I am also aware that the company is/was largely owned by one of Cinti's strongest ins names, Alpaugh. This certainly can't hurt.

What is your due diligence on the company as well as thoughts looking ahead...? You obviously are comfortable with them, but why?

I'm comfortable with them because I've met their management team and understand their change of direction. They were a very old and very regional property and causulty company. As the internet age made the world a smaller place, being regional became a problem in P & C when trying to price themselves competitively with national companies. They had to decide to grow nationally very quickly or develop products where being regional was a plus.

The B+ AM Best rating is to be expected as they are very small and have completely changed focus from P & C to a singularly focused life product (pre-need funeral) in the last few years. The consolidation of businesses in several states is due to companies they aquired when they were still trying to remain competitive in P&C and no longer fit within their focus for growth.

They chose to enter the pre-need funeral insurance market 3-years ago and are making great moves there. The fact that each state has different state laws about insurance, medicaid, funerals etc. makes it an asset to be small and only have to grow one state at a time. With pre-need funeral insurance, a company has to have very active road reps in each area that visit the funeral homes regularly.

In pre-need funeral, there are small regional players that outperform the big guys in small pockets of the country and have done so for years. Cincinnati is becomming one of those companies.

Cincinnati is a very solvent company. When you look at how many dollars in assets they have for each $100 in liabilities here is how they compare to other companies:
American General $118.47 in assets per $100 in liabilities
John Hancock $106.74 per $100
MetLife $104.57 per $100
New York Life $110.79 per $100
State Farm $113.81 per $100
Cincinnati Equitable $257.85 per $100

As far as the guaranteed issue FE product. It is just a product they had on the shelf. It is obvious where they cut expenses to keep the premiums so low. Low commissions, zero marketing costs (it's just along for the ride with their pre-need product which is their main product), 3-year ROP on initial coverage, no brokerage network other than yours truly.

Overall, we as agents don't really know which companies will be strong 10 or 20 years from now...at least I don't. But we can select companies that have products that make sense, are sellable, have good customer and agent support, and are rated with AM Best and others with a rating we are comfortable with.

These are all my opinions and I am NOT an insurance company analizer or a great financial mind. Take it for what it is...one agent's opinion.

 

[kuhn123]

""" The fact that each state has different state laws about insurance, medicaid, funerals etc. makes it an asset to be small and only have to grow one state at a time."""

Does this mean that their intention is to go national at some point?

This product does make sense, and something like this is going to be valuable down the road for anyone wanting to compete in FE because:

1) AARP, ColonialPenn, etc. When you are up against companies that are marketing direct to the consumer and not having to pay an agent, their premium will always crush what you as a commissioned agent carry. We all know that those products are many times undesireable, but......

2) Price is King. Just as much of our target audience does when shopping for a car, the only thing they care about is.."What's the monthly payment?" Nothing matters beyond that. The product may be horrendous, (increasing premium, term to 75, decreasing benefit, etc.) but many folks don't care as long as it's cheap.

So, even if your commission on this product is less than 1/3 of your regular commission, you will have to have a very low cost graded benefit to offer just to be able to present to the folks that are not willing to look past premium to get all the facts.

If it is their intention to go national, but are really just trying to regulate their growth, that seems prudent of them. I've seen at least one company that wanted to "conquer the world in a day", ended up with more FE sales than they knew what to do with, and 1 year later was pulling out to "evaluate our FE program" ie. "wow, advancing all that commission sure does add up in a hurry!'

By the way, I do have a very nice lawn that is Kentucky Bluegrass, If you could please, check with the carrier and see if this may qualify as being a "Kentucky Agent".

 

[Newby]

I'm not aware of any plan to go national any time soon. But they do plan to add two neighboring states soon.

You haven't priced AARP life insurance if you think their premiums are hard to beat. They are among the highest of any company and they are the only final expense I know of that reserves the right to "raise the rates in the future as long as they do it on everyone."

Kentucky Bluegrass doesn't get you a Kentucky non res license but it wouldn't hurt to wear a Kentucky Wildcats jersey once in a while.

 

[kuhn123]

I'm not aware of any plan to go national any time soon. But they do plan to add two neighboring states soon.

You haven't priced AARP life insurance if you think their premiums are hard to beat. They are among the highest of any company and they are the only final expense I know of that reserves the right to "raise the rates in the future as long as they do it on everyone."

Kentucky Bluegrass doesn't get you a Kentucky non res license but it wouldn't hurt to wear a Kentucky Wildcats jersey once in a while.

I just quoted AARP on-line. 78 male, guaranteed issue, $10,000 whole life, 2 yr ROP, level premium is $103/mo. (of course can be raised for whole class).

I was not trying to start a discussion about AARP, but this is exactly what I would need a cheap premium, low commission GI for.

 

[senior-advisor-indiana]

Scott,
I have found that Cincinatti Equitable is not a GI product even for the older ages. My 1st policy I sent in was declined due to UW issues. This lady had colon cancer a year ago and is in remission. A prime candidate for a GI policy. Unless I filled something out wrong. Is there a trick to getting it on a GI basis?

 

[myinsurebiz]

Shenandoah's 0 to 85 GI Whole Life product is going to rock the house. 100% TeleSales capable.

GI so long as no aids and not presently confined to NH or Hospital.

Amazing rates and commission to boot.

80% to 100% street with no leads - Or - 50% to 75% street + up to 25% of AP produced that can be spent on inhouse leads - prequalified call back leads and / or live client transfers. 4% to 6% Renewals years 2 - 10

3 to 9 month advance - depends on agent.

Immediately Vested Contracts. E&O Required.

More info? Ring me up . . .

Tom

 

[Newby]

Scott,
I have found that Cincinatti Equitable is not a GI product even for the older ages. My 1st policy I sent in was declined due to UW issues. This lady had colon cancer a year ago and is in remission. A prime candidate for a GI policy. Unless I filled something out wrong. Is there a trick to getting it on a GI basis?

Which box did you check on the app? The same app is used for the underwritten product. I can't imagine that they turned anyone down but I'll check it out.

 

[HoosierDaddy]

Which box did you check on the app? The same app is used for the underwritten product. I can't imagine that they turned anyone down but I'll check it out.

That would be funny if the senior-advisor checked the wrong box... That sounds like something I may do. Although Newby you must understand it does get hectic trying to get all his work done in the Senior-Advisor's (1 Hour - Work Day)