Premium Financed Life Insurance
- Thread starter 77flanery
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Agent / Adjuster Index Page
Agent / Adjuster Spotlight
Information & Advice for Agents, Agencies and Adjusters
Agent and Company Alert
Zero Premium Life Insurance or
No Cost to the Insured Plans
It has come to the attention of the Texas Department of Insurance ("Department") that a nontraditional product is being offered in the Stranger-Owned Life Insurance (STOLI) market. Texas agents are being solicited to assist in the sale of what are frequently called "estate maximization plans," "zero premium life insurance" or "no cost to the insured" policies to consumers, most commonly elderly persons between the ages of 65 and 85.
The Department is investigating and gathering details regarding these offerings. This bulletin is to alert you as a Texas insurance agent to exercise caution with respect to these transactions.
Life insurance helps protect the people who depend on the insured for financial support. It can help pay final expenses and other expenses that the insured would have paid for through earnings, including mortgage payments, bills, dependent or child care and college tuition. Insurance agents and companies must be licensed by the Department to legally sell life insurance in the state.
Texas law provides that an individual may consent to another person purchasing insurance on his or her life. Texas law also allows owners of life insurance policies to sell existing life insurance policies to entities called viatical or life settlement providers. Viatical or life settlement providers and brokers are required to hold a certificate of registration issued by the Department in order to do business in Texas.
If, as a Texas agent, you are considering:
Agent / Adjuster Spotlight
Information & Advice for Agents, Agencies and Adjusters
Agent and Company Alert
Zero Premium Life Insurance or
No Cost to the Insured Plans
It has come to the attention of the Texas Department of Insurance ("Department") that a nontraditional product is being offered in the Stranger-Owned Life Insurance (STOLI) market. Texas agents are being solicited to assist in the sale of what are frequently called "estate maximization plans," "zero premium life insurance" or "no cost to the insured" policies to consumers, most commonly elderly persons between the ages of 65 and 85.
The Department is investigating and gathering details regarding these offerings. This bulletin is to alert you as a Texas insurance agent to exercise caution with respect to these transactions.
Life insurance helps protect the people who depend on the insured for financial support. It can help pay final expenses and other expenses that the insured would have paid for through earnings, including mortgage payments, bills, dependent or child care and college tuition. Insurance agents and companies must be licensed by the Department to legally sell life insurance in the state.
Texas law provides that an individual may consent to another person purchasing insurance on his or her life. Texas law also allows owners of life insurance policies to sell existing life insurance policies to entities called viatical or life settlement providers. Viatical or life settlement providers and brokers are required to hold a certificate of registration issued by the Department in order to do business in Texas.
If, as a Texas agent, you are considering:
- Soliciting or selling life insurance products to your clients where another person purchases insurance on the client’s life in exchange for an immediate lump sum payment or a partial payment of the policy’s face value to beneficiaries upon the insured’s death;
- Soliciting or selling life insurance products to your clients for the sole purpose of their selling the policy to a viatical or life settlement provider; or
- Materially participating in transactions leading up to the purchase of life insurance for the above stated purposes; then
- Inspect the insurance application and sales materials closely. If in doubt about the veracity or legitimacy of these products, contact the Department to make sure all forms and items have been properly filed and approved.
- Obtain all details about the program and have a complete understanding of your obligations. If necessary, discuss this information with an attorney.
- Confirm that all persons and entities involved in your transaction are properly licensed and registered by the Department. Agent, insurer, premium finance companies, and life or viatical settlement provider and broker licensure and registration can be verified at the Department’s website (Agent, Consumer, Industry News, Workers Compensation and Assistance from the Texas Department of Insurance), or through the Department’s toll-free Consumer Help Line (1-800-252-3439).
- Carefully consider the transactions in connection with potential violations of the Insurance Code, including those practices outlined in Insurance Code Chapter 541 which include rebating, improper inducements, misrepresentations, and other deceptive trade practices.
- Remember that filing an application for insurance containing materially false information may be prosecuted as insurance fraud and subject the actor to civil and criminal penalties.
- Insurance companies should investigate sudden spikes in production and business produced outside an agent's normal geographic territory.
- Use common sense. Remember the warning "If it seems too good to be true, it probably is."
- unauthorized insurance;
- deceptive trade practices;
- advertising violations;
- rebating and other prohibited inducements;
- misrepresentation of terms and conditions of an insurance policy;
- misappropriation of money belonging to an insurer or insured; and
- fraudulent or dishonest conduct.
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nate124
Guest
77flanery
I know that you are new to insurance. So am I.... but you have to think realistically here. First off, when you contract with a company to sell a product, you are contracting with the INSURANCE company. They never tell you what insurance company you are representing here!
Now, if you go to the following link for contracting:
intro
Click on contracting and type in their creative password of: insurance123
It takes you to the contracting part, right??
The first thing that you fill out is a release form..... in this release it states that there is a $78.00 contracting fee. It doesn't state where this money goes. Now... most legit companies charge an appointment fee of anywhere between $5-20 or so. THAT is legit. More importantly, you are paying the INSURANCE COMPANY, not some agency. On top of that, I find it hilarious that they are collecting these fee's via Paypal. Name me a legit company who collects fee's via paypal instead of via a real payment processing company.
Second... now you are on to the agency agreement. This is an agreement between you and the AGENCY (once again.... not an insurance company) to sell life insurance. I'll state again... WHAT INSURANCE COMPANY ARE YOU WORKING WITH?!?!
Third... you are on to a lovely addendum. At the top, please note the very professional looking globe logo for Infinity Life Insurance. (Looks like a 3 year old painted that "logo" before their first nap time). This addendum gives you your commission splits. Once again... no insurance company is named!!!! My favorite part of this addendum...
"Agents signing on with Infinity Life will be required to ASSIGN THEIR COMMISSIONS to Infinity Life and will be considered a 1099 employee"
I'm still wondering who you are ordering to assign your commissions?? AIG? Hmm... I would think you would need a contract with AIG??? Weird. Must be AIG's new way of doing business... ??? HA!
So... when all the dust clears, you have a contract with an agency, who is agreeing to pay you HUGE commissions on a product they won't tell you about... OTHER THAN that it is free....er... wait no... I meant zero premium...OOOOPS nope, I meant... PREMIUM FINANCED life insurance.
They are taking advantage of you... and it's unfortunate. Good luck in your career. If you really do want to learn about this business, browse this forum! You will learn a ton, and learn how to establish a LEGITIMATE insurance business from the start.
I know that you are new to insurance. So am I.... but you have to think realistically here. First off, when you contract with a company to sell a product, you are contracting with the INSURANCE company. They never tell you what insurance company you are representing here!
Now, if you go to the following link for contracting:
intro
Click on contracting and type in their creative password of: insurance123
It takes you to the contracting part, right??
The first thing that you fill out is a release form..... in this release it states that there is a $78.00 contracting fee. It doesn't state where this money goes. Now... most legit companies charge an appointment fee of anywhere between $5-20 or so. THAT is legit. More importantly, you are paying the INSURANCE COMPANY, not some agency. On top of that, I find it hilarious that they are collecting these fee's via Paypal. Name me a legit company who collects fee's via paypal instead of via a real payment processing company.
Second... now you are on to the agency agreement. This is an agreement between you and the AGENCY (once again.... not an insurance company) to sell life insurance. I'll state again... WHAT INSURANCE COMPANY ARE YOU WORKING WITH?!?!
Third... you are on to a lovely addendum. At the top, please note the very professional looking globe logo for Infinity Life Insurance. (Looks like a 3 year old painted that "logo" before their first nap time). This addendum gives you your commission splits. Once again... no insurance company is named!!!! My favorite part of this addendum...
"Agents signing on with Infinity Life will be required to ASSIGN THEIR COMMISSIONS to Infinity Life and will be considered a 1099 employee"
I'm still wondering who you are ordering to assign your commissions?? AIG? Hmm... I would think you would need a contract with AIG??? Weird. Must be AIG's new way of doing business... ??? HA!
So... when all the dust clears, you have a contract with an agency, who is agreeing to pay you HUGE commissions on a product they won't tell you about... OTHER THAN that it is free....er... wait no... I meant zero premium...OOOOPS nope, I meant... PREMIUM FINANCED life insurance.
They are taking advantage of you... and it's unfortunate. Good luck in your career. If you really do want to learn about this business, browse this forum! You will learn a ton, and learn how to establish a LEGITIMATE insurance business from the start.
- 14,809
Anyone who pays a dime to any agency upfront without seeing the sale materials, knows the names of the insurance companies or cannot get information to research upfront is legally retarded and should not carry a license. You are a danger to yourself and everyone around you.
I am hearing this is yet again a "I'd tell you but I'd have to kill you" deal where you pay first and then you get the info.
It's our job as agents to be diligent to research the insurance companies and in this case the investors before we decide if we'll affiliate ourselves.
Oh well - another well placed call to the DOI and NAIC will solve this problem. As we just saw with Miracle, they will not allow any agency to require money upfront before they release any information. So if anyone from this outfit is reading this you can either disclose the information upfront, or explain to your DOI and NAIC why you can't.
I am hearing this is yet again a "I'd tell you but I'd have to kill you" deal where you pay first and then you get the info.
It's our job as agents to be diligent to research the insurance companies and in this case the investors before we decide if we'll affiliate ourselves.
Oh well - another well placed call to the DOI and NAIC will solve this problem. As we just saw with Miracle, they will not allow any agency to require money upfront before they release any information. So if anyone from this outfit is reading this you can either disclose the information upfront, or explain to your DOI and NAIC why you can't.
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nate124
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lol.... you are funny.
