GUL for Seniors

[Newby]

We have debated back and forth if GUL is a good product for seniors. I'm of the mindset that whole-life is MUCH better especially if the premium is close.

I ran into this yesterday on a policy review.

73 year old woman was telling me about the $25,000 whole-life policy she bought on her 79 year old husband 18-months ago. She called it whole-life many times when I was asking about it.

When I finally got her to show me the actual policy, it was UL. Cash value table showed the zeros at age 86 for him. He's a very healthy 79 year old (smoker) now.

When I read the details of the policy it said "Guaranteed No-Lapse Death Benefit Premium Amount= $219 per month.

She was set up on auto bank draft from day one at the target premium amount of $201 per month.

According to her the agents didn't explain that it was anydifferent than the other policies she has (regular whole-life policies.)

Agent mistake? Agent didn't understand? Who knows?

Since he is still healthy I can hopefully find him a better deal anyway. But if a few more years would have went by it could have been a real problem for them.

 

[HarryRenard]

In cases of her age group I do think a good GUL is the way to go. At that age they obviously need DB and shouldnt be concerned with the cash value and shes going to get more DB with the GUL than WL.

 

[dgoldenz]

We have debated back and forth if GUL is a good product for seniors. I'm of the mindset that whole-life is MUCH better especially if the premium is close.

I ran into this yesterday on a policy review.

73 year old woman was telling me about the $25,000 whole-life policy she bought on her 79 year old husband 18-months ago. She called it whole-life many times when I was asking about it.

When I finally got her to show me the actual policy, it was UL. Cash value table showed the zeros at age 86 for him. He's a very healthy 79 year old (smoker) now.

When I read the details of the policy it said "Guaranteed No-Lapse Death Benefit Premium Amount= $219 per month.

She was set up on auto bank draft from day one at the target premium amount of $201 per month.

According to her the agents didn't explain that it was anydifferent than the other policies she has (regular whole-life policies.)

Agent mistake? Agent didn't understand? Who knows?

Since he is still healthy I can hopefully find him a better deal anyway. But if a few more years would have went by it could have been a real problem for them.

I'd put $10 on it that the agent explained they will get more death benefit with GUL and the person just did not understand the difference between GUL and whole life. They have to sign a projection for UL that shows $0 cash value in all years (at least for someone his age that's a smoker), so it's not like the agent probably pulled the wool over her eyes. There's no such thing as a healthy 79 year old smoker, and for it to take 10 years to pay the death benefit at his age is a good deal.

 

[ronmelton3]

$201 for 25K @ 79 Smoker is a really good rate.
Foresters Planright is over $400 for WL.

Are you writing a non-FE WL Newby?

 

[Newby]

$201 for 25K @ 79 Smoker is a really good rate.
Foresters Planright is over $400 for WL.

Are you writing a non-FE WL Newby?

I write everthing.

My opinion is that $201 for a healthy 79 year old is tossing money down the toilet if it is only guaranteed to age 85.

The agent didn't even explain that they could have paid a little more and had it guaranteed forever. He did a crap job. But I'm thankful that he made it easy for me.

 

[dgoldenz]

I write everthing.

My opinion is that $201 for a healthy 79 year old is tossing money down the toilet if it is only guaranteed to age 85.

The agent didn't even explain that they could have paid a little more and had it guaranteed forever. He did a crap job. But I'm thankful that he made it easy for me.

If it's really only guaranteed to 85, then that was pretty dumb...if they just bought this policy they should still be able to have a mid-stream projection run to show the current cost of guaranteeing to age 100 or forever.

 

[ronmelton3]

Perhaps you could refer him to AARP for that term to 80 crap! I'm sure he would get a great rate since he would only have a year left.
I would think, that if that UL plays out at 85, the agent is looking at an E&O claim. According to what you said, the policyholder was led to believe they have WL.
Good to see you were able to help them.

 

[Rollem]

The real problem in my opinion is that agents like that don't consider the fact that the client may not be able to afford the premium at some point. ie LTC/Medicaid. You gotta have some type of RPU.

 

[walleyeb1]

Before we go recommending replacing with something else, "help the client first". That's my philosophy. Check to see if there is a catch up provision in the policy, there is in a lot of gul products. If so they should catch up and change the monthly auto-pay to the needed amount. You are right original agent should have set them up paying the amount needed to keep the policy in force. Why they didn't with such a small monthly difference in premium is beyond me.