IUL Errors & Omissions

Discussion in 'E&O - Errors and Omissions for Insurance Agents' started by Brokers Alliance, May 25, 2011.

  1. Brokers Alliance
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    Brokers Alliance Guru

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    I was sent a link to a video presentation on the tax advantages of a non qualified IUL income alternative to qualified plans. As you know, we sell a significant amount of IUL premium for supplemental retirement income. So I'm a huge fan of IUL for tax advantaged income, especially of NACOLAH.

    What I'm not a fan of is the swiss cheese promo presentation fraught with misstatements and unaddressed items that devalue life insurance and give us all a bad name. Here are justa few:

    You have to declare that this is life insurance and not wait well into the presentation and/or bury it all together. You can't compare a employer matching qualified plan to a non qualified IUL and make sweeping statements that IUL is superior net of all taxes.

    You can't say that an IUL in a down marketing will never lose money when in fact during the S&P downturn of 2001-2003, IUL policies lost money on the policy expense charges that ranged from 200-300 basis points. That's a compounded loss of 2-3% each year.

    Just trying to keep it real.
     
  2. dgoldenz
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    dgoldenz Moderator Moderator

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    Insurance agents misleading people? Nah, that would never happen...
     
  3. Crabcake Johnny
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    Crabcake Johnny Guru

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    I posted this yesterday on another thread but per Calsurance, E&O claims associated with the sale of life products was up 34.55% in 2010 with the most common allegation being: "misrepresentation by providing erroneous description"
     
  4. WinoBlues
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    WinoBlues Guru

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    Reminds me of the early UL days.

     
  5. Brokers Alliance
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    Wow, thanks for the info on Cal. Good stuff.
     
  6. Crabcake Johnny
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    Crabcake Johnny Guru

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    Reminds of of an agent I spoke with a while back. Good guy, wrong training. He was taught that "life" was a four letter word - not to be spoken during the presentation.
     

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