Guardian or Penn Whole life

Jan 28, 2019

  1. Purdue
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    Purdue New Member

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    I am hearing that Penn shows high values on the Non-Guaranteed assumptions side but ends crediting very close to the guarantees assumptions level and that Guardian whole life delivers better . Is there any truth in this and can we see in-force policies anywhere to verify this?
     
    Purdue, Jan 28, 2019
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  2. pfg1
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    pfg1 Guru

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    If you understand a whole life illustration - and how guaranteed and non-guaranteed are illustrated, you'll realize that can't be true. Both are great companies. Policy design is important also, if its max funded it will do substantially better than one thats not.
     
    pfg1, Jan 29, 2019
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  3. Purdue
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    Purdue New Member

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    I hear what you are saying but one agent is very reluctant to show Penn at all stating what I said above. So, I was wondering if I can see in force example.
     
    Purdue, Jan 29, 2019
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  4. pfg1
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    pfg1 Guru

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    I have clients with several mutual companies. The only issue I've ever seen where illustrations really don't match up closely are if dividends decreased, or client has a loan out (direct recognition) otherwise they are really close and in some cases literally almost to the dollar, Penn included.

    NONE are ever anywhere near the guaranteed side.
     
    pfg1, Jan 30, 2019
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  5. Curve50880
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    Curve50880 New Member

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    I have nothing but good things to say about the Penn Mutual Whole Life. On a consistent basis it has performed well over time. They have a very strong dividend history. I have seen on several occasions the Penn Whole Life outperform the Guardian product but it was not by much. In all honesty though, Guardian's product is very solid. I don't think you will go wrong either way.
     
  6. Allen Trent
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    Allen Trent Guru

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    Grid off the internet for the 6 largest WL carriers. Sorry it doesn't show actual dividend to original illustrated, but you can guess that a dividend scale in place at the year of issue is what was built into the original illustration. So, all are lower today than they were illustrated. However, that wasn't planned or designed to happen, it is a function of the interest rate markets over the last several decades of where carriers are permitted to invest the money.

    For years I had always heard that Mass Mutual Dividend was higher in the industry because they owned Oppenheimer Funds & made lots of money owning it & thus having to share those profits with their Mass mutual Shareholders. I believe Mass sold Oppenheimer last year to Invesco.

    Had always heard NW Mutual paid a higher dividend for a long time in the 1990s & early 2000s because they had went long in the bond market in the 80s when most carriers bought shorter bonds, thus those extra returns on the longer bond durations benefited the mutual policy holders in that 10-15 year period.

    Penn & Guardian appear to track very well over the last 30 years
    upload_2019-2-6_16-19-10.png
     
  7. Purdue
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    Purdue New Member

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    It's not the dividend but insurance expenses.

    Here is what my agent say's:
    "We've found that Penn's illustrations illustrate the minimum insurance expense and then charge higher rates, pulling down the IRR. "

    "We have historical policies from Mass Mutual and Guardian displaying the illustrated and actual returns. We have worked with smaller companies in obtaining this information for years but they've always refused to provide and offer a higher payout instead. "

    "This is something we check, and ask companies for, before offering to consumers. The end result is that the 4 Major Mutual companies have displayed proof whereas smaller companies have not. "

    "The actual Net Values on Penn and other smaller companies will likely produce returns closer to the guaranteed values"

    I guess it's on what the agent is selling. Agents who sell only Penn will say good things about Penn. Some only sell major 4 and they have the above to say about the smaller companies. So confusing...
     
    Purdue, Feb 6, 2019
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  8. Allen Trent
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    Allen Trent Guru

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    I don't sell any of those companies, but I believe what the agent is saying is factually incorrect about Penn or any WL policy. On any WL illustration, you have 2 main columns. Guaranteed (worst case). That is locked & guaranteed to happen at worst case. The projected is the Dividend column that can be better or worse. If the Dividend is not the issue like the rep says, how can "raising the expenses" come into play if the Dividend is consistent & good. the worst case was already locked down at issue. the only variable is then the projected Dividend. what he is stating sounds more like a statement about Universal Life. Otherwise, he would be saying they lower their dividend on existing policies so that they can charge higher expenses. That is the only way a WL policy can be impacted by the carrier is the Dividend. There are no ongoing individualized expense/Cost of insurance categories like a UL based product for them to increase, only the Dividend

    look on the state insurance website & see if he is even appointed with Penn. If not, it might be a bigger reason why he is against them. I don't care about any of those carriers, I just hate seeing misinformation, unless I am mis-understanding something. I wouldn't want to give this agent my business if he is stating "its not the dividend, but insurance expenses" if it cant be true.
     
  9. Purdue
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    Purdue New Member

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    If the dividend is lowered, is it lowered to all? Existing business and to all new business?
    Maybe that's why Penn does not release in force policy data.

    Insurance expense cannot be more than base premium. Is this true? Or can the insurance company dip into the cash values and take any amount(as long as the remaining cash value is not less than the guaranteed assumption) as insurance expense?

    What is "guaranteed assumption" anyway? Those two words contradict one another.
     
    Purdue, Feb 7, 2019
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  10. Allen Trent
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    Allen Trent Guru

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    If dividends are increased or decreased, they are generally change for both existing and new business, but some dividend scales can vary based on the type of product, a grouping of when issued.

    carriers cannot dip into your base policy CV for anything. the base WL policy is 100% guaranteed at the time it is issue. You are basically guaranteed that you will have guaranteed coverage for that contractual premium to age 100. Then, the same is true for the guaranteed cash value columns, those will for a fact happen unless you have depleted the funds by taking loans or elect a reduced paid up policy.

    If I stated "guaranteed assumption" I didn't mean to. but I don't believe I said that.

    the only way a WL insurance policy will not perform in the worst case like the guarantees in the policy is if you harm the policy or the carrier goes bankrupt & your policy values were greater than the amounts guaranteed in your states Insurance Guaranty Association which many times is $100,000k cash values & $300,000 death benefit if a carrier was insolvent (extremely extremely unlikely)
     
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