Lincoln Heritage

[Newby]

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I do not regularly replace RNA. I replace them more than LH because I run into them more than LH. I just do not run into LH as much as you guys do. May be the income levels leads are generated from. I think LH sells the lower end of income. Most times I come out with more face and premium than they had before.

When I go in I am normally invited in. They have asked me to review their policies off of a referral from a family member or friend that is a client of mine. So I come in more as an advisor than a guy calling off of a lead. So the trust level is much higher.

I explain that they have a certificate that is much more like a group or association plan than policy issued by an admitted Life Insurance company. Sometimes we call the Fraternal and ask them the questions. I prefer to hang people with their own rope. None of this is much different than how people replace LH, Primerica or AARP.

A bigger part of it is I believe a policy is superior to a certificate. Part of this came from an old post by, I think, Newby RE Oxford being a policy vs a fraternal. Same as some agents believe an A- rated company is superior to a B++ rated company. Most of what I have learned about SIWL I got from this forum. My FE market is just a little different than the lead card fillers.

Having grown up, in the business, through the UL imploding days. Guarantees are a big deal to me. I normally compare guarantees.

We hear of agents replacing policies over $3-5 a month, that is not me. But I will replace over guarantees though.

Yes. It's easy to replace fraternals and you don't need to bring up state guarantees. You just explain what a fraternal is. It's members helping members. You as a member are committing to bailing out the company IF they fail to meet their obligations. You never get a policy because a policy is a closed contract and the insurance company could not take money from your policy without your permission. A fraternal has it written right into their certificate that they can do that.

I've replaced a lot of Foresters over that and the fact that they used to make a big deal over their critical illness benefit to people that it didn't even cover (anyone age 68 or older.)

Fraternals aren't bad. I use them when they are a good choice. I like RNA a lot. But if everything else is equal I think people would prefer a policy.

 

[pcbinsurance]

"Guarantees are a big deal to me. I normally compare guarantees."
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By comparing guarantees, how are you not using the State Guaranty Fund as a benefit or inducement to the client switching their policy? Can you elaborate on the specific question that Sports Nut brought up?

 

[WinoBlues]

"Guarantees are a big deal to me. I normally compare guarantees."
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By comparing guarantees, how are you not using the State Guaranty Fund as a benefit or inducement to the client switching their policy? Can you elaborate on the specific question that Sports Nut brought up?

I normally do policy reviews. I look for holes in the contract or simply call customer service on speaker phone. I have actually call the old agent, on speaker, and ask them if the fraternal can raise rates or raid cash values.

As a side note: I almost always pull out the old agent's card. On my phone I check if they are appointed with a company that issues life insurance policies.... I want the client to remember the old salesman. Poison the waters.

 

[rousemark]

"Guarantees are a big deal to me. I normally compare guarantees."
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By comparing guarantees, how are you not using the State Guaranty Fund as a benefit or inducement to the client switching their policy? Can you elaborate on the specific question that Sports Nut brought up?

You don't have to mention the Guaranty fund to compare guarantees. All you have to do is look at the policy/certificate. A fraternal has no real guarantees, they can raid the cash values at will. or also increase the cost to the certificate owner through "assessments" . Even though it is not technically a premium increase, it has the same result.

 

[pcbinsurance]

I understand you don't have to mention the State Guaranty Fund and it's best to poke holes in or focus on what a certificate may be lacking in.

I just don't believe agents aren't mentioning it when comparing the two options.

 

[WinoBlues]

I understand you don't have to mention the State Guaranty Fund and it's best to poke holes in or focus on what a certificate may be lacking in.

I just don't believe agents aren't mentioning it when comparing the two options.

You may be correct. Do you ever mention it?
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You don't have to mention the Guaranty fund to compare guarantees. All you have to do is look at the policy/certificate. A fraternal has no real guarantees, they can raid the cash values at will. or also increase the cost to the certificate owner through "assessments" . Even though it is not technically a premium increase, it has the same result.

Yup! A fee is not technically a tax but the end result is the same.

 

[rousemark]

I just don't believe agents aren't mentioning it when comparing the two options.

I'll bet you didn't believe the President when he said, "I didn't have sex with that woman, Ms Lewinsky" either.

 

[seeknulfind]

Thanks for the insight guys - I never knew much of this stuff about Fraternals.

While it was drilled in my head, I'm forbidden to even mention the existence of a "you know" in VA, I had no idea about the "assessments" or their ability to raid cash values. Makes me want to be careful about saying "your rate will never go up" when quoting RNA, etc.

Andy

 

[jdeasy]

Thanks for the insight guys - I never knew much of this stuff about Fraternals.

While it was drilled in my head, I'm forbidden to even mention the existence of a "you know" in VA, I had no idea about the "assessments" or their ability to raid cash values. Makes me want to be careful about saying "your rate will never go up" when quoting RNA, etc.

Andy

It's right on RNA's literature that the rate will never increase on the whole life.

The scare tactics some use about fraternals are just that, scare tactics.

 

[Newby]

It's right on RNA's literature that the rate will never increase on the whole life.

The scare tactics some use about fraternals are just that, scare tactics.

In reality, a STRONG fraternal might be better off than other insurance companies. The fact that they CAN make assessments from the certificates cash value COULD be better than a default that would happen to a non-fraternal.

For instance, if RNA needed to raise a $100,000,000 (one hundred million dollars) and let's say they had one million certificate holders of cash value certificate holders, they could take $100 from each and have their $100,000,000 loan. While this sounds like a negative, it could be much better than a non-fraternal that had to declare bankruptcy.

But the fact that they have the ability to do that sounds like a huge negative to the public.