Monumental 10 Pay

[SouthernComfort]

AM meeting with a couple today and have been discussing the 10 pay option. 69 year old male, preferred, 17500, premium 172.90, after 10 years the client has paid in 20,748. His question, does the death benefit grow as the payments get close to the planned death benefit amount? Same question for him and his wife

 

[bboman23]

It does not grow. They will have 17500 paid up insurance. Very good product to sale, just harder when they get a lot older like that.

 

[SouthernComfort]

how is it not a mec then?

 

[VolAgent]

how is it not a mec then?

Who cares? While in general you should avoid a MEC when possible, aren't they buying this for the death benefit? If you are selling this for reasons other than just the death benefit, you may need to reexamine your objective or the tool you are using to solve the problem.

Also, the cash value approaching the death benefit at a later date is not what makes it a MEC. In simple terms, it is when you put in too much cash in the early years relative to the death benefit provided. Of course, it does account for age and thus a senior can put a whole lot more premium in relative to death benefit versus a younger person.

 

[SouthernComfort]

Got it, so why should I advise someone to pay 20,748 in premiums for 17,500 in benefit (if they live 10 years)

 

[VolAgent]

Got it, so why should I advise someone to pay 20,748 in premiums for 17,500 in benefit (if they live 10 years)

You picked the product, not me.

Just about any table rated product, which all FE products are, will have a date at which the insured has paid in more premium than death benefit. Often the insured will have hit life expectancy before then, so it is still a good deal. In this case, they may be better off with a life pay product.

 

[SouthernComfort]

I met a 72 year old who had a delta life (which is debit) she was paying 72 for 5000 coverage but in year 8 coverage shown was 10000 and in year 15 and going forward coverage was 15500

 

[WinoBlues]

I met a 72 year old who had a delta life (which is debit) she was paying 72 for 5000 coverage but in year 8 coverage shown was 10000 and in year 15 and going forward coverage was 15500

Maybe pre need?

...............

 

[RonRoberts]

You picked the product, not me.

Just about any table rated product, which all FE products are, will have a date at which the insured has paid in more premium than death benefit. Often the insured will have hit life expectancy before then, so it is still a good deal. In this case, they may be better off with a life pay product.

I've sold a few Settlers 20 pay's (never a limited pay Monumental) in which the client came out ahead by paying less than the actual death benefit.

 

[Newby]

Got it, so why should I advise someone to pay 20,748 in premiums for 17,500 in benefit (if they live 10 years)

Because how else are they going to get $17,500 if they die this month? The over amount is all they are paying for the benefit of the insurance and only if they live long enough to make all the payments.

People pay 10-years for term life policies all the time and at the end have no death benefit at all. They get nothing other than protection.

The same with car insurance for all the years they didn't wreck their car.

If they start the payment today, they are covered today. If they want to start a savings account (the other option they consider) they only have the amount they have saved up when they die.

Some like it. Some don't.