Lincoln to Add Variable Universal Life-Long Term Care Hybrid
- Thread starter Northeast Agent
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- 4,990
Any thoughts on this now that Fiduciary standard is owed on variable products? How will this look in a sustained down market or a flat decade or more like the 1960s to 1980s when you are tying the concept of market returns, ART COI for life insurance that may or may not be needed to get to a LTC benefit that could have been bought as a stand alone LTC with an RILA or brokerage account of EFTs.
Honestly asking. Not so much at sale time, but in bad markets in early 2000, there were a lot of brokers sued for products sold, GMWB not offered on a VA & some huge crashed VUL that in some cases couldn't receive more premiums to save because ILIT gifting premiums were already maxed. And those lawsuits were not when a fiduciary standard was owed like it is as of this week I believe
This seems like accident waiting to happen unless I am missing something
Honestly asking. Not so much at sale time, but in bad markets in early 2000, there were a lot of brokers sued for products sold, GMWB not offered on a VA & some huge crashed VUL that in some cases couldn't receive more premiums to save because ILIT gifting premiums were already maxed. And those lawsuits were not when a fiduciary standard was owed like it is as of this week I believe
This seems like accident waiting to happen unless I am missing something
The problem was not the products per se. The problem was that neither the companies nor those that sold them actually understood their weakness.
The products are meant to be actively managed.People that sold them, even the biggest producers like M offices were not set up to actively manage the products. Most insurance agents are not set up to actively manage a product. Since 2014, when I first started offering them every variable I have placed has averaged better than 20% per year net after all costs including COI. Granted I don't have many on the books since most people are wary of the risk and prefer other products. We are set up to actively manage the products the same way we actively manage 401k accounts.
Fiduciary standard has nothing to do with investment performance. It has to do with doing whats best for the client based on the clients goals ,needs etc A fiduciary should not let his bias dictate what is offered to a client. A Fiduciary should educate a client on the pro's and con's of every solution presented.
In the 60's there were 4 down years in the 70's 3 and only1 down year for the S&P in the 80's. IN 1975 the market was up 31%.The decades you reference were not as bad as we remember. Two losing years in a row is very rare. it has happened only twice since 1945 Comparing to a brokerage account and a separate policy might be a fair comparison. It will still come down to account management and fee's etc,so probably a toss up. That really is no different than going to by term and invest the difference
I haven't seen the product yet so I cant comment on the particulars and if it is good for a client or not . I do think once the new 7702 insurance policies start to come out VUL sale's are going to rocket.
The products are meant to be actively managed.People that sold them, even the biggest producers like M offices were not set up to actively manage the products. Most insurance agents are not set up to actively manage a product. Since 2014, when I first started offering them every variable I have placed has averaged better than 20% per year net after all costs including COI. Granted I don't have many on the books since most people are wary of the risk and prefer other products. We are set up to actively manage the products the same way we actively manage 401k accounts.
Fiduciary standard has nothing to do with investment performance. It has to do with doing whats best for the client based on the clients goals ,needs etc A fiduciary should not let his bias dictate what is offered to a client. A Fiduciary should educate a client on the pro's and con's of every solution presented.
In the 60's there were 4 down years in the 70's 3 and only1 down year for the S&P in the 80's. IN 1975 the market was up 31%.The decades you reference were not as bad as we remember. Two losing years in a row is very rare. it has happened only twice since 1945 Comparing to a brokerage account and a separate policy might be a fair comparison. It will still come down to account management and fee's etc,so probably a toss up. That really is no different than going to by term and invest the difference
I haven't seen the product yet so I cant comment on the particulars and if it is good for a client or not . I do think once the new 7702 insurance policies start to come out VUL sale's are going to rocket.
The product will be massively pushed, and the product will be massively sold. With that I have no doubt.
- 4,990
Massively pushed & massively sold don't sound like words in the cornerstone tenets of a Fiduciary standard.
Fiduciary Standard has many interpretations. I see examples weekly of Fiduciaries that I think clearly violate the standard. They mislead lead about fee's the state their fee is 1% but don't disclose or hide the fact that their RIA tags on another 50 bps and then they are using another money manager for another 50 bps. Or the fiduciary that will never show or recommend an annuity or life insurance even to a person that wants guaranteed income because they don't believe in insurance.
Everyday in the financial business someone is selling a product to someone that doesn't understand it or that it's not right for or only offers what they like or what provides them the best comp or gets them a trip etc.
Sure people will be sold VUL's and then they will blow up. However not one whole life policy from 1990 on even came close to meeting the 10 and 20 year illustrations used to sell them and no whole life policy sold today will meet its 20 year illustration because every day high interest bonds that support the company portfolios mature and are replaced by very low interest rate bonds. So what is the difference. Both cases agents selling things they don't understand to people that don't understand what they are getting.
The whole point of the new Fiduciary rule is to embarrass insurance agents by having to disclose their commissions if they are touching and rolling over qualified money to annuities or life insurance nothing is being done to actually help the consumer get what is best for them.
Everyday in the financial business someone is selling a product to someone that doesn't understand it or that it's not right for or only offers what they like or what provides them the best comp or gets them a trip etc.
Sure people will be sold VUL's and then they will blow up. However not one whole life policy from 1990 on even came close to meeting the 10 and 20 year illustrations used to sell them and no whole life policy sold today will meet its 20 year illustration because every day high interest bonds that support the company portfolios mature and are replaced by very low interest rate bonds. So what is the difference. Both cases agents selling things they don't understand to people that don't understand what they are getting.
The whole point of the new Fiduciary rule is to embarrass insurance agents by having to disclose their commissions if they are touching and rolling over qualified money to annuities or life insurance nothing is being done to actually help the consumer get what is best for them.
Can you elaborate on this point please
Fiduciary standard? Whatchoo talking about Willis Reed? It's going to be a VUL policy with LTC riders. Low threshold of suitability standards. The risk for the LTC benefits growth will be shifted to the consumers. Tied to market risk and internal contractual fees, I imagine. So, 30 years from now when the policyholder is 87 years old and their adviser is dead do you think anyone is going to think "Oh, my trusted financial adviser wasn't looking out for my best interests (not that the adviser even has a duty to do this) I should have bought that Securian policy that Jack Lenenberg showed me with the 5% guaranteed compounded growth on my LTC benefits?" Heck no. Too bad, so sad.
Helluva underrated comment here ^^^^^^^^^^^^
- 4,990
That made me laugh out loud. Combining the Gary Coleman & NBA great Willis Reed
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