Mar 26, 2014
Yes, I meant professional independents that actually see clients that have non-dirt floors.
"Firing the client" is your way to give an ultimatum, or "wash your hands" of the client. If you have done everything you should do - send an email, make a call, send something in writing, to meet with your client... and your client is unresponsive... then really, the client "fired you" without telling you.
All you get to do in "firing the client" is put documentation on your side.
Are you liable for the contract REGARDLESS of what the client does? I don't think so.
Why Clients Win Lawsuits Against Their Advisors - Best Practices
Taking Notes May Insulate Your Business - Best Practices
An Engagement Letter May Protect You - Best Practices
What is an agent liable for? Being pro-active in giving good and accurate advice and ASSISTING the client in managing their policies. If a mistake is made, then making a good faith effort to fix it.
Now, will companies raise the costs of insurance to the MAXIMUM that was illustrated? Not without notification to the policyholder.
What will that cause? Adverse Selection. The good risks will find new policies and those with bad health will continue to pay... and the company will go BK.
We can see the same thing already happening in the LTC markets right now. Good LTC risks that are alerted to rising premiums, look for other policies. Bad LTC risks will continue to pay the premiums.
BTW, I like referencing videos from experts other than myself. Sometimes videos more clearly and more articulately explain things than I can do or that a text-based median, like a forum, can do.
Let me add another perspective that hits home for me.
My father had purchased quite a few policies from a particular agent through the 90's. Then he hit financial trouble. That agent left this captive firm, and my father didn't bother to ask an agent for professional advice on his policies - even from the local agency.
He called customer service instead. Customer service is great at giving options and doing what policyholders want, but they do NOT give advice.
Instead of taking out loans, he CANCELLED 3 out of 4 of his policies and took out the cash. That 4th policy... is a key man policy that's a Variable Whole Life. He stopped making payments on that policy for 8 years.
Today, that policy is on "life support", but he's been making more consistent payments when I was with MassMutual, and I still help him manage that policy today.
If he had talked to a trained and skilled agent that would've reviewed all his options... he's have a lot more protection in place today.
His health isn't great. Any policy he applies for is heavily rated, but not declined. But I can see first-hand how having a good agent that can be relied on for ongoing consultation and advice can impact a family's financial security.
A UL can be just as contractually Guaranteed as a WL. Most agents just do not design them that way.
When you run a UL's Guaranteed Illustration out to age 100, often the premium ends up being just slightly under a WL with the same initial DB.
What if the client lives past age 100? It would be rare, I grant you, but possible. With a UL the policy has no value or DB at age 100 because it has "imploded". With a WL the policy either is paid up or endows with a full cash payout equal to the DB.
This is just a question, SC....not starting yet another augment.
If you had payed attention in our last UL argument you would already know the answer to that question...
But since I like you Im not going to make you re-read a 15 page thread
Most UL policies Mature at age 100 and Endow at age 121. That means the policy is paid up at age 100 and coverage remains in force until age 121 when the DB will be paid out to the owner if they are still around.
Some carriers/policies allow the coverage to continue even after the Endowment year. But traditionally it pays out.
But Maturity and Endowment can vary by carrier & product (I would guess around 80% use the 100/121 scenario currently)
So I guess I should have said to extend the Guaranteed Column out to Maturity.
Are you sure you mean "UL" here? What you said describes a WL policy. Just how much wine have you had tonight?
If you are saying that a UL policy can be paid up (to any age the client may live to) I'd need to see it to believe it. If this is true...exactly at what age does this UL policy's internal COI stop increasing?
What I said describes Permanent Insurance... not just WL.
Im not running more illustrations for you. I still have 2 more to run for clients tonight. For that you really will need to go back to our last thread. I posted that exact illustration that shows the Guaranteed Values extending to age 121 and premiums stopping at age 100.
COI stops at age 100 along with the Premiums.
This is the only part I disagree with. IMO, on a UL, the COI never stops. Have a good night.
In the spirit of putting our UL arguments to rest here is the proof that you opinion is wrong. A fact is a fact.
(I should note that NA uses the term Maturity instead of Endowment; the terms vary between carriers)
This is straight from North American's UL illustrations:
I am not going to post the whole thing because it has all of my personal contact info on it. I will email it to you if you would like.
Well...it looks like the COI stops at 100. You sure you didn't take a crayon and cross out the "W" and put in a "U"?
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