Is the Transamerica IUL bad?

[Tahoe Ray]

Sounds like a Great Product!

See, Penislord was right after all.

 

[TwiLight]

So I checked Comdex rating and Transamerica is in the Top 10. I checked "10 best IUL companies" and they're in the Top 10. I truly want to know, since the whole "fees" thing is always brought up, how does it compare to another company?

The problem with this thread is that you were not properly trained in what an IUL is and how fees and costs are deducted from the policy values. If you knew this, you would not need to question yourself on this thread.

Bottom line, the expenses deducted from the policy values monthly are higher than most companies that offer competitive IULs. These higher costs would include: Policy Fees, cost of insurance and premium loads. Also on the Index side you have participation rate and interest rate caps that also affect overall performance.

So when you see the negative press on Trans IUL it is that there costs and fees are higher in comparison to companies like North American, American National, Pacific Life, Principal, Lincoln Financial, etc, etc.

As for your numbers on sales. WFG accounts for more than 50% of the IUL sales at Trans. WFG has a lot of pull on the design of the product accordingly. Now the direct commission to a top level agency like WFG will be higher with higher costs built into the product along with higher Target premiums to get paid on. The higher Target premium is a hidden compensation increase to a company like WFG as they train agents to replace and 1035 policies.

The 1035 receipts will add to the overall commission as most WFG agents sell below target to get the policy premium lower so it is perceived by the client that they are winning the price battle. Ex: 125% can pay more overall commission than 135% based on the target premium and additional funding from a 1035.

The Skipper

 

[phoenixlord]

Good morning, I'm actually an agent with WFG. I'm not here to discuss about the business model and recruiting, I have a legitimate question: is the Transamerica IUL that we offer bad? I have 3 scenarios from a family I did policies with: a dad and his two small children.

When I sat down with him, he had a WRL (what is now Transamerica) policy that had $4,500 saved, he was contributing, I believe, $210 a month and the minimum no lapse was $190, very badly written. So we did a 1035 on it, I made him increase his premium to $290 a month with $250,000 in coverage and a minimum no lapse at 210. Since he got the policy with me, in about two years, his cash value doubled to $9,500.

He has two kids: a daughter that turned 4 on June 1st and a son who I believe is now 8 years old. The total premium contributed per child, since they started the policy on September of 2017 is $2,000 and in their cash value there's $1,200.

Can anybody explain to me what is wrong with this? With WFG I do have options with other companies through Crump, plus Pac and Nationwide.

Thanks

This is what I was talking about! That poor client of your's needs a million dollar 20 or 30 year term. It protects his kids till they graduate and settle down in life. He can easily get the 20 year term for 100 bucks and the rest should go to his Roth ira but what did you do? With your half baked knowledge you put in an IUL which even Mr.DHK admits that noone understands. Not just Transamerica but every company's IUL is bad. Every IUL is bad. I quickly ran the numbers on the Allianz IUL. 250k DB easily takes $550 a month to be well funded but you grossly underfunded it. He probably said that's all he could afford and he wanted his mortgage paid off in case something happened to him and that's how you designed it. He said he was worried about his mortgage and you heard it as your mortgage. ha!

If that IUL performs this badly now, wait till the carrier drops the caps or adjusts the expenses. Before the client catches on, go do the right thing for him. Couldn't resist this one but that's it. Cheerio!

 

[phoenixlord]

These higher costs would include: Policy Fees, cost of insurance and premium loads. Also on the Index side you have participation rate and interest rate caps that also affect overall performance.

You forgot wtf fees

 

[Ghost]

This is what I was talking about! That poor client of your's needs a million dollar 20 or 30 year term. It protects his kids till they graduate and settle down in life. He can easily get the 20 year term for 100 bucks and the rest should go to his Roth ira but what did you do? With your half baked knowledge you put in an IUL which even Mr.DHK admits that noone understands. Not just Transamerica but every company's IUL is bad. Every IUL is bad. I quickly ran the numbers on the Allianz IUL. 250k DB easily takes $550 a month to be well funded but you grossly underfunded it. He probably said that's all he could afford and he wanted his mortgage paid off in case something happened to him and that's how you designed it. He said he was worried about his mortgage and you heard it as your mortgage. ha!

If that IUL performs this badly now, wait till the carrier drops the caps or adjusts the expenses. Before the client catches on, go do the right thing for him. Couldn't resist this one but that's it. Cheerio!

This sounds like Primerica... and did you read one of my comments? I offered him a 20 year term and he didn't want it.

 

[Ghost]

The problem with this thread is that you were not properly trained in what an IUL is and how fees and costs are deducted from the policy values. If you knew this, you would not need to question yourself on this thread.

Bottom line, the expenses deducted from the policy values monthly are higher than most companies that offer competitive IULs. These higher costs would include: Policy Fees, cost of insurance and premium loads. Also on the Index side you have participation rate and interest rate caps that also affect overall performance.

So when you see the negative press on Trans IUL it is that there costs and fees are higher in comparison to companies like North American, American National, Pacific Life, Principal, Lincoln Financial, etc, etc.

As for your numbers on sales. WFG accounts for more than 50% of the IUL sales at Trans. WFG has a lot of pull on the design of the product accordingly. Now the direct commission to a top level agency like WFG will be higher with higher costs built into the product along with higher Target premiums to get paid on. The higher Target premium is a hidden compensation increase to a company like WFG as they train agents to replace and 1035 policies.

The 1035 receipts will add to the overall commission as most WFG agents sell below target to get the policy premium lower so it is perceived by the client that they are winning the price battle. Ex: 125% can pay more overall commission than 135% based on the target premium and additional funding from a 1035.

The Skipper

Thanks, this is why I'm checking overall. I do have other companies I can offer, so I'm thinking of going that route.

 

[phoenixlord]

This sounds like Primerica... and did you read one of my comments? I offered him a 20 year term and he didn't want it.

Ok, I will talk about airline stocks now. Will that make me Warren Buffet? Don't blindly repeat your master's words. I did read all your comments and I don't believe you truly offered a term option. You must have said that term will run out but IUL is permanent or something like that.

 

[TwiLight]

This sounds like Primerica... and did you read one of my comments? I offered him a 20 year term and he didn't want it.

What you offered means nothing unless you got a signed rejection letter. This is an obvious E&O claim if you did not. When a Client is grossly underinsured and you did not make the effort to sell him/her the amount of insurance they really need, is and has been successfully litigated as an E&O Claim. A signed rejection is the only way to prove you did attempt to offer it to your client. Remember, the spouse is the one to most likely bring the lawsuit to court and you can't rely on the spouse's testimony to support you.

A signed rejection letter serves two points. One...It stops lawyers in their tracks... and second.... it is a sales tactic to slap the prospect in the face by realizing how serious this is with a signed rejection letter. It will many times make them relook at why they should listen to a good recommendation to protect their family fully.

The Skipper

 

[Ghost]

What you offered means nothing unless you got a signed rejection letter. This is an obvious E&O claim if you did not. When a Client is grossly underinsured and you did not make the effort to sell him/her the amount of insurance they really need, is and has been successfully litigated as an E&O Claim. A signed rejection is the only way to prove you did attempt to offer it to your client. Remember, the spouse is the one to most likely bring the lawsuit to court and you can't rely on the spouse's testimony to support you.

A signed rejection letter serves two points. One...It stops lawyers in their tracks... and second.... it is a sales tactic to slap the prospect in the face by realizing how serious this is with a signed rejection letter. It will many times make them relook at why they should listen to a good recommendation to protect their family fully.

The Skipper

I'll keep that in mind, I hadn't thought about it, thanks!

 

[Ghost]

Ok, I will talk about airline stocks now. Will that make me Warren Buffet? Don't blindly repeat your master's words. I did read all your comments and I don't believe you truly offered a term option. You must have said that term will run out but IUL is permanent or something like that.

Nope, wrong, I explained to him about getting a 20 year- term but he didn't like the fact that the term policy will run out. Oh, and my Master says that it's good to get people a term policy to at least get people insured. My Master is myself, I live far away and have sort of branched off from everybody, this is why I'm here, so let's keep it on topic, thanks.