LIFE INSURANCE ILLUSTRATIONS

[playball41]

Ok so, I would like someone to enlighten me. I am finding myself where I can't in good faith give a UL illustration/ quote because of the minimum guarantee displayed which literally always ends up the cash value pooping out in just a few years out. Of course the midpoint and current rates are always showing sufficient enough results to give me confidence. What I am asking is should I not worry about the minimum guaranteed and focus the customer on the mid and/ or current. The sales support team at one of the carriers I sell stated don't worry about the minimum ? I have a buddy that wants a 1,000,000 CV policy so I run a illustration it comes out at like $18,598 target premium @ age 54 preferred but CV poops out at year 11 how do I in good faith sell this? Illustration is the Pru UL plus. Please all reasonable comments welcome I am relatively new retired military just really doing things on my own learning as I go. I use Brokers Alliance for my contracts. Bob

 

[eersfan]

Companies are required to show the minimum guaranteed interest rate. Are you illustrating a level or increasing death benefit?

 

[playball41]

I am always quoting level DB I really don't know why just by default. I guess I am asking should we focus the customer on the non- guaranteed because the companies are going to maintain a competitive current rate to stay competitive?

 

[playball41]

It has been stated to me not to worry about the minimum guarantee but I don't want my customers policy to fall apart on down the road.

 

[eersfan]

UL contracts that were issued in the 80's and early 90's collapsed because interest rates were sky-high which required less premium to keep them in force. As interest rates dropped, the premium wasn't enough to cover the mortality costs which required the insurance companies to use some of the cash to keep the policy "alive". Over time, the cash dropped to a point where the insurance company notified the policyowner that in order to keep the policy in force, the premium would need to be increased...a bunch.

 

[WinoBlues]

It has been stated to me not to worry about the minimum guarantee but I don't want my customers policy to fall apart on down the road.

Are you quoting GULs for cash accumulation? If so that may be the wrong product.

Does your 54 year old want a certain cash value at a certain age or does he want coverage till he dies? Not that he can not have both. The goal(s) will dictate the product and the large cost difference.

You may want to have a talk with the marketing manager you are working with. Get him to give you the time you need or kick him to the curb.

Thank you for your service.

Lee

 

[WinoBlues]

UL contracts that were issued in the 80's and early 90's collapsed because interest rates were sky-high which required less premium to keep them in force. As interest rates dropped, the premium wasn't enough to cover the mortality costs which required the insurance companies to use some of the cash to keep the policy "alive". Over time, the cash dropped to a point where the insurance company notified the policyowner that in order to keep the policy in force, the premium would need to be increased...a bunch.

Add in the increasing the cost of insurance. In some cases multiple times.

 

[playball41]

I am well aware of the result of a lot of the older policies and the position that these folks are in now that's why I am being so cautious. Cash accumulation hasn't been the goal of the couple GUL illustrations I have run. more of a death benefit that won't exhaust.My 54 year old isn't worried about cash accumulation as much as keeping the policy in force. death benefit $1 million for the kids. This is the first I've heard the concept of adding in the increasing cost of insurance will have to educate myself but feel free to elaborate.

 

[playball41]

And I have no real mentor! Doing all research myself

 

[WinoBlues]

I am well aware of the result of a lot of the older policies and the position that these folks are in now that's why I am being so cautious. Cash accumulation hasn't been the goal of the couple GUL illustrations I have run. more of a death benefit that won't exhaust.My 54 year old isn't worried about cash accumulation as much as keeping the policy in force. death benefit $1 million for the kids. This is the first I've heard the concept of adding in the increasing cost of insurance will have to educate myself but feel free to elaborate.

On the increasing cost of insurance. If you are quoting me I was referring to the companies not only lowering the interest rates but increasing the internal cost of insurance as well.

Sounds like your buddy is looking for a permanent life insurance policy not a "cash value" policy. A GUL is a permanent life policy. Not necessarily a cash accumulation policy. Sounds like pretty easy deal structure wise. Just underwriting.

It may be a good idea to try to find a good agent to split a few cases with. OJT.