Help With Knocking Out a UL

[Rearden]

I came across a gentleman currently going through underwriting (awaiting the results of his blood test) for a Lincoln LifeGuarantee UL product.

He's 65, premium's around $180.00 per month, and the death benefit is $100,000.

We took a look at the illustration and I showed him how the cost of insurance substantially rises as he hits his mid-70s, to the point where he will have to increase his premiums.

My question is -- was this the correct way to analyze this particular product? Is there anything else you'd point out in the illustration or just particular drawbacks in general that you'd emphasis?

And, as a side note, talk about working your own book; inside of 6 months, the guy offering the UL has sold the husband and wife a 20k and 30k Americo SPWL, to him a $30k Baltimore Life SPWL ($54.5k death benefit) and a MoO Plan G MedSupp.

 

[rousemark]

I came across a gentleman currently going through underwriting (awaiting the results of his blood test) for a Lincoln LifeGuarantee UL product.

He's 65, premium's around $180.00 per month, and the death benefit is $100,000.

We took a look at the illustration and I showed him how the cost of insurance substantially rises as he hits his mid-70s, to the point where he will have to increase his premiums.

My question is -- was this the correct way to analyze this particular product? Is there anything else you'd point out in the illustration or just particular drawbacks in general that you'd emphasis?

And, as a side note, talk about working your own book; inside of 6 months, the guy offering the UL has sold the husband and wife a 20k and 30k Americo SPWL, to him a $30k Baltimore Life SPWL ($54.5k death benefit) and a MoO Plan G MedSupp.

When you say you showed him the escalating cost of insurance, are you speaking or the guaranteed cost or the current cost? Also, just because the cost of insurance may one day exceed the amount of premium being paid, that does not mean the client will have to increase his premium because you have additional money being paid into the policy in the form of interest. Don't know about the product you are speaking of but some UL's guarantee to stay in force to 121 even if the cash values go to zero as long as the scheduled premium is paid on time.

I will say that I couldn't find a plan that would stay in force for more than 10 years even on the current projections at that age and premium. Lincoln may be that mush stronger than the Cos. I looked at but I doubt it. Sounds like the agent is doing a minimum premium which is no more than a term plan.

Just think, you are building a book you will be able to work down the road and those leads will cost nothing..

 

[SportsNut]

I came across a gentleman currently going through underwriting (awaiting the results of his blood test) for a Lincoln LifeGuarantee UL product.

He's 65, premium's around $180.00 per month, and the death benefit is $100,000.

We took a look at the illustration and I showed him how the cost of insurance substantially rises as he hits his mid-70s, to the point where he will have to increase his premiums.

My question is -- was this the correct way to analyze this particular product? Is there anything else you'd point out in the illustration or just particular drawbacks in general that you'd emphasis?

And, as a side note, talk about working your own book; inside of 6 months, the guy offering the UL has sold the husband and wife a 20k and 30k Americo SPWL, to him a $30k Baltimore Life SPWL ($54.5k death benefit) and a MoO Plan G MedSupp.

First off, it is a GUL product, meaning at the illustrated premium the product is guaranteed to run to 90, 95, 100 or 121... then as long as the insured doesn't miss a prem payment then the contract will remain in force, period. Now if it is GUL at the illustrated cost of insurance but not at a worst case ins, then it really isn't GUL anyway. So this needs to be determined for sure.

Also, based on that prem of 180 buck mo, the rate class is either pref plus or pref, one or the other. Meaning he must be in pretty good health at age 65. Or, did the agent illustrate a good rate class to get him to apply then come back with another offer...? This is possible.

If he is in that good of health to qualify for Pref Plus rates, you could propose a United of Omaha GUL at 100K with a mo prem of $ 139.46, assuming he is ins age 65. If he is Pref rate (instead of pref plus) then that takes the rate to 155.98 mo.

But there is much more to be known about this case in order to render good advice, but with what we've got to go on, that is the best I can do so far.

Regarding working the one client, that is pretty strong IMO. The client had better had a LOT of $$$$$$ left into liquid accounts, banks, brokerage, etc, with 50K going into 3 SPWL policies, or else rain could fall based on these decisions.

____________________________________________

PS. Neither the product that the 65 yr old has applied for, not the UoO GUL are a compatible products with any FE product. They are day and night different in terms of rate class (the best rate versus a table 4 or 8 rate, which is app 3-400% higher in raw cost of ins), and u/w requirements. The GUL products are fully u/w and will require paramed exam, HOS, and possibly even more requirements based on each company guidelines. So the point is, you've posted this question in the FE section, when it is really more of a Life Ins section question. Although happy to offer any opinions, but you may get better feedback over in the Life Ins section.

 

[rousemark]

First off, it is a GUL product, meaning at the illustrated premium the product is guaranteed to run to 90, 95, 100 or 121... then as long as the insured doesn't miss a prem payment then the contract will remain in force, period. Now if it is GUL at the illustrated cost of insurance but not at a worst case ins, then it really isn't GUL anyway. So this needs to be determined for sure.

Also, based on that prem of 180 buck mo, the rate class is either pref plus or pref, one or the other. Meaning he must be in pretty good health at age 65. Or, did the agent illustrate a good rate class to get him to apply then come back with another offer...? This is possible.

If he is in that good of health to qualify for Pref Plus rates, you could propose a United of Omaha GUL at 100K with a mo prem of $ 139.46, assuming he is ins age 65. If he is Pref rate (instead of pref plus) then that takes the rate to 155.98 mo.

But there is much more to be known about this case in order to render good advice, but with what we've got to go on, that is the best I can do so far.

Regarding working the one client, that is pretty strong IMO. The client had better had a LOT of $$$$$$ left into liquid accounts, banks, brokerage, etc, with 50K going into 3 SPWL policies, or else rain could fall based on these decisions.

____________________________________________

PS. Neither the product that the 65 yr old has applied for, not the UoO GUL are a compatible products with any FE product. They are day and night different in terms of rate class (the best rate versus a table 4 or 8 rate, which is app 3-400% higher in raw cost of ins), and u/w requirements. The GUL products are fully u/w and will require paramed exam, HOS, and possibly even more requirements based on each company guidelines. So the point is, you've posted this question in the FE section, when it is really more of a Life Ins section question. Although happy to offer any opinions, but you may get better feedback over in the Life Ins section.

Didn't even occur to me to run preferred Plus!.. I never quote that rate as few older folks qualify. When you quote the Pref Plus and it comes back at a higher rate, you can have problems placing it. Don't know if all companies do this but the ones I have written standard porducts with will issue the ebst rate a client qualifies for even it the app is submitted std so that is normally quote. never had a problem placing a policy when I come back and say, "I'm sorry, but I have to tell you but they issued the plan $50.00 cheaper than what I quoted you."

 

[SportsNut]

Didn't even occur to me to run preferred Plus!.. I never quote that rate as few older folks qualify. When you quote the Pref Plus and it comes back at a higher rate, you can have problems placing it. Don't know if all companies do this but the ones I have written standard porducts with will issue the ebst rate a client qualifies for even it the app is submitted std so that is normally quote. never had a problem placing a policy when I come back and say, "I'm sorry, but I have to tell you but they issued the plan $50.00 cheaper than what I quoted you."

The point being is we don't know what rate class this Lincoln GUL is run at either, do we...? I would agree that the best approach if the person is in reasonably decent health would be run illustration at Std, and then sell it at that rate... and if u/w accepts a better class then offer the good news to the client.

My point was that the quoted rate class may not be attainable anyway unless the proposed insured is pretty darned healthy... and if they are then go back with the UoO... if they aren't then it may be a moot point anyway. As stated earlier, we don't know enough about this case at this time, to speculate upon it.

 

[Rearden]

Preferred-plus was in the illustration; table ended at age 121; he's in very good health -- weight seemed OK although I didn't ask.

IMO is AmeriLife.

Is going through some testing currently about some continuing pains on his right side. One doc said gout, the other said plursy (sp?).

I remember seeing the minimum premium was $158-ish in the illustration somewhere.

Also, I meant 2 Americo SIWL policies, and 1 SPWL Baltimore Life policy.

So... to make sure I get this right... regardless if this is a GUL or traditional UL... the cost of insurance *will* rise at some point because premiums and interest rates are *not* guaranteed, with either UL, correct?

At this point my question is purely conceptual, due to my ignorance with UL products -- what is the rationale for a 65-year-old man to get any type of UL?

Thanks,
Dave

 

[WinoBlues]

Who is the client. Is he the Tbl4+ FE type? Does he have the income to pay the $180 comfortably? Seems that the current agent would have some splain'n to do? If he is pref'd why was he sold a very over priced SIWL policy. Now probably looking to replace is own business with a GUL. While LFG is a good company, that product is not the best price GUL. I would have the client questioning the old agent's motives.

Apples for apples you can beat that price. But P+ is tough. Prf'd may be doable. Get a LFG agent guide from your upline and see if he would have qualified for P+. Do a prequal on him and quote an appropriate policy. That and the Americo policies should undermine the old agent.

As to the rational? Again, depends on who the client is. My guess is Guaranteed death benefit at a term price. That policy is GUL not an Accumulator type UL.

 

[SportsNut]

Preferred-plus was in the illustration; table ended at age 121; he's in very good health -- weight seemed OK although I didn't ask.

IMO is AmeriLife.

Is going through some testing currently about some continuing pains on his right side. One doc said gout, the other said plursy (sp?).

I remember seeing the minimum premium was $158-ish in the illustration somewhere.

Also, I meant 2 Americo SIWL policies, and 1 SPWL Baltimore Life policy.

So... to make sure I get this right... regardless if this is a GUL or traditional UL... the cost of insurance *will* rise at some point because premiums and interest rates are *not* guaranteed, with either UL, correct?

At this point my question is purely conceptual, due to my ignorance with UL products -- what is the rationale for a 65-year-old man to get any type of UL?

Thanks,
Dave

First off, the other agent is p*ssing away his time right now if a 65 yo is undergoing tests which have not had a complete diagnosis; ie Pleurisy, often caused by pneumonia, or gout. Often times with gout there are other underlying health issues, or could just be too rich of dietary intake. Until this matter is resolved and completely, there isn't a company out there going to issue a 65 yo pref plus on life ins, and not even Std, for that matter.

With GUL the prem and face amt ARE guaranteed, and this is regardless of what the cost of ins does in reality... that is the point of GUL, hence the guarantee. UL is not guaranteed in any way other than the minimum int rate and max cost of ins, which would cause a prem to raise substantially. Quite a diff product than a GUL... well, same product w/o the guarantee that the product will run to age 100 or 121 as long as insured make the scheduled prem.

Why does a 65 yo need 100K of covg...? I would ask whe he doesn't need 250K... or 500K for that matter...? What if he has a mtg and a spouse who is going to live to 100 yo, and if he died tomorrow, they better have a lot of cabbage stashed away for mom to live off of... The 100K may pay a mtg off in full, or it will add 2-3-4K yr income subsidy, but that surely doesn't replace the loss of his soc sec income, does it...? Nope.

 

[toehill]

Preferred-plus was in the illustration; table ended at age 121; he's in very good health -- weight seemed OK although I didn't ask.

IMO is AmeriLife.

Is going through some testing currently about some continuing pains on his right side. One doc said gout, the other said plursy (sp?).

I remember seeing the minimum premium was $158-ish in the illustration somewhere.

Also, I meant 2 Americo SIWL policies, and 1 SPWL Baltimore Life policy.

So... to make sure I get this right... regardless if this is a GUL or traditional UL... the cost of insurance *will* rise at some point because premiums and interest rates are *not* guaranteed, with either UL, correct?

At this point my question is purely conceptual, due to my ignorance with UL products -- what is the rationale for a 65-year-old man to get any type of UL?

Thanks,
Dave

Patrick Kelly

This book is an easy read and will teach you all you need to know about UL. I am a pro at this product after reading this.

 

[Franz Kafka]

So... to make sure I get this right... regardless if this is a GUL or traditional UL... the cost of insurance *will* rise at some point because premiums and interest rates are *not* guaranteed, with either UL, correct?

[bold mine]

"Coverage Protection Guarantee

The Coverage Protection Guarantee (CPG) is built into the base policy and is included automatically at issue. It runs to the insured's age 121 and helps you protect what's most important to you by guaranteeing that your coverage will be there for life. Here's how:

During the CPG Period, the CPG guarantees that the policy will not lapse even if the cash surrender value is insufficient to cover the monthly deductions. Any changes to the policy such as loans, partial withdrawals, changes in the death benefit, changes in scheduled premiums, and adding riders may terminate the guarantee or reduce its duration. In most cases, policyowners may make additional payments to place the guarantee back into effect, but this will result in increased out-of-pocket costs."

Lincoln LifeGuarantee UL
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Patrick Kelly

This book is an easy read and will teach you all you need to know about UL. I am a pro at this product after reading this.

Really ..................