New zero premium life insurance policy/life settlements

[James]

[FONT=arial,helvetica,univers]Insurance companies are cracking down, too—in part because they fear these arrangements will depress profits. When insurers set premiums, they often assume a certain number of policyholders will drop their coverage as financial or personal circumstances change. But as investors intent on collecting death benefits amass policies, insurers worry they'll have to pay benefits on a greater number of policies than their actuarial models anticipated. [/FONT]

I just love this defense! We don't want to pay out on products we sell, in fact we study on not paying out on our products! Gotta love the morality of insurance companies.

 

[sman]

Quite honestly Mary, how do you think a board full of insurance professional would have reacted to this:

This product will make thousands of millionaires in the next few months. No Hype!


No how exactly would that math work where over the next several months anyone would be a millionaire? You can't come here with complete garbage like that and expect a postive response.

And if it really is that great then it'll sell itself. I'm trying to figure out if the post was simply a way to round up a bunch of agents for a pseudo-MLM scam.

Come on John. If 2,000 agents (wanted to make sure we get the thousands the email spoke of) can sell 4,000 people between the ages of 65-85 one of these "free" policies, that would make "thousands" of millionaires. That's only 8,000,000 people. Don't you know 4,000 people between the ages of 65-85? Of course, assuming 2% of those contacted (via phone or mail) actually responded and then 50% of those actually bought, you'd only have to reach 400,000 people yourself to sell 4,000. So if 2,000 agents needed to reach 400,000 people each, that's only 800 million people. Guess we need to get this approved in China if we want to accomodate thousands of millionaires.

 

[sman]

I just love this defense! We don't want to pay out on products we sell, in fact we study on not paying out on our products! Gotta love the morality of insurance companies.

Insurance companies are neither moral or immoral. No company is for that matter. It's the people that run them that may have morality issues.

Secondly, pricing any product has to do with the overall cost and desired profit margin. How else would an insurance company determine their rates if they can't predict within a certain margin what their future expenses (i.e - claims) are on a specific product.

Do you begrudge any company for using the law of large numbers to determine their cost structure, be it life insurance, auto or homeowners insurance, toilet paper, toothpaste or "name any product you want"?

Probably not the best example to use, but airlines base part of their pricing and future profitability on oil prices. Some did a great job of hedging and were well protected from the increase in the cost of fuel. Others did not (i.e. - Delta Airlines). This doesn't make them immoral does it? Maybe not the best predictor of oil prices, but immoral? I think not. Neither should an insurance company be considered immoral when the market forces them to make changes because they want to remain financially stable so shareholders are happy and people get to keep their jobs.

Just my two cents.

 

[James]

Insurance companies are neither moral or immoral. No company is for that matter. It's the people that run them that may have morality issues.

Secondly, pricing any product has to do with the overall cost and desired profit margin. How else would an insurance company determine their rates if they can't predict within a certain margin what their future expenses (i.e - claims) are on a specific product.

Do you begrudge any company for using the law of large numbers to determine their cost structure, be it life insurance, auto or homeowners insurance, toilet paper, toothpaste or "name any product you want"?

Probably not the best example to use, but airlines base part of their pricing and future profitability on oil prices. Some did a great job of hedging and were well protected from the increase in the cost of fuel. Others did not (i.e. - Delta Airlines). This doesn't make them immoral does it? Maybe not the best predictor of oil prices, but immoral? I think not. Neither should an insurance company be considered immoral when the market forces them to make changes because they want to remain financially stable so shareholders are happy and people get to keep their jobs.

Just my two cents.

I fully understand what they are saying, I should of use a better word such as Mentallity, as in the mentallity of issueing such language even though the author used better words than I have heard in the past. Yet though, I really don't understand how a company doesn't expect viaticals/life settlements to occur when it is financially the best option for the client. Let's face it, if one couldn't resell their used cars the price of newer cars would likely go up now wouldn't they? Or just let us assume that Viaticals are not being estimated by Life Carriers in their number crunching, who is too blame? Whose job would that be if not the life carrier?

I have no doubt as a skeptic that these numbers of lapse policies (unlike some agents that claim they hold 100% retention) and the way Life Carriers calculate the future cost favors them not the Insured or Owner of these policies. That is of course my skeptic side showing thru. Just another reason why I like the shorter term and building on permanency over a period of time. I just don't see the need to sell what most will allow to lapse if it is preventable.

 

[midwestbroker]

Like it has been mentioned prior, there have been policies like this in the past, and maybe it is correct this time. We will just have to wait and see. We have proved that Mary is not the only one that has been solicted to offer these products. So, lets wait and see what is going on.

I hope tha that it is a legit deal, since I could offer this and sell a bunch of it. At least it is starting in a state I am not licensed in so I can watch from the sidelines.

 

[Crabcake Johnny]

The question is who should be the guinea pig - your client?

 

[maryjd123]

Quite honestly Mary, how do you think a board full of insurance professional would have reacted to this:

This product will make thousands of millionaires in the next few months. No Hype!


No how exactly would that math work where over the next several months anyone would be a millionaire? You can't come here with complete garbage like that and expect a postive response.

And if it really is that great then it'll sell itself. I'm trying to figure out if the post was simply a way to round up a bunch of agents for a pseudo-MLM scam.

you know what John I am not even going to comment on that reply about the complete garbage --
and about rounding up agents for a mlm scam -- that was uncalled for

if you would like to know... and i am pretty sure you do -- if you are recruiting agents in order to get an override from an insurance company then you have to be licensed in their state... well lets ask a question here

where am i licensed... wyoming, ohio --- who on this board is in wyoming except for me? In ohio? oh almost forgot i am getting my license in north carolina -- i am moving to ohio -- so i will have to be licensed there... and for the north carolina -- i plan on calling upon clients for this life insurance....
so no i am not recruiting...

i think next time there is an opportunity i will keep it to myself --- and as for a positive response... well i guess that is a lost cause

did i steer anyone wrong with the continental care product?????
if you were not able to get the leads from msis -- i know a couple people who couldnt.. but that just depends on where you are...

so good luck everyone..

Mary

 

[Crabcake Johnny]

My apologizes for insinuating you were just recruiting. I know you and that's not your style. You still could have guessed at the response from the "thousands of millionaires" line.

 

[STIBROKER]

so good luck everyone..

Mary

oh come on now,,,,,,You know we are looking out for your best interest... have I been wrong in the past...there are no short cuts in insurance and the odds are always stacked to favor the house.......

 

[midwestbroker]

John - I am happy to say that my clients will not guinea pig this, however someone's will. Maybe they will do the Mega thing. Get new agents to sell a product they do not understand for a bit, then quit. Or maybe this is the real deal. We can only wait and see.

I know that I have gotten over excited about offers and not fully researched them. The millionaire bit was a red flag, but that just could have been some IMO's bad advertising. How many ads have we seen like this that pan out to be nothing? I know I see the "stay at home, no selling, no inventory, and make millions" and go right past them. Mary, John has a point that if you are going to market to professional agents, don't do the "pie in the sky" thing.

However, we value your posts and if you think that it is worth looking at, then lets look past the bad ad.

Here are the questions that I have:
1. Who is the insurance company offering the policy?
2. Who is paying the premium?
3. Is there any poss tax penality that my client could face?
4. What if the person(s) paying the premium stop? Can the client continue? What options are there in this situation?
5. What health questions are there? What type of verification process is there?

Anyone else have some questions? Rather then bad mouth it, research it to let it prove that it is worth our time.

Example: When I worked at Firestone, I would ask people "When was the last time you checked your tires?". They could say 2 weeks and how could I dispute that? But I learned to ask, "When you last checked your tires, what pressure did you put in it?" Ahh...2 weeks ago would not cut it! 95% could not bluff their way out of it. And that is why your tires wore out so quick...blah blah blah

Point - Asking the right question(s) that require a definate answer will prove the situation, or any situation for that matter.

Mary, thank you for bringing this post. I am sure it would have come about eventually, but you are the only one that has talked to someone about this. So, you are the leader so far. Thanks!