Questions on FE Company's

[hope33709]

Some FE company's send certificates (mostly Canadian) instead of policy's, are these just as safe as a policy?

Do your clients ever question getting a certificate instead of a policy?

And do you tell them they are getting a certificate instead of a policy?

Reason for my questions is I would like to go with Royal Neighbors for FE, they have great prices and additives, but are certificates instead of policy's.

 

[theinsuranceman]

Some FE company's send certificates (mostly Canadian) instead of policy's, are these just as safe as a policy?

Do your clients ever question getting a certificate instead of a policy?

And do you tell them they are getting a certificate instead of a policy?

Reason for my questions is I would like to go with Royal Neighbors for FE, they have great prices and additives, but are certificates instead of policy's.

If you took out a policy would you yourself prefer receiving a policy or a certificate?

 

[Josh]

I'm not sure about all companies that issue certificates, but Royal Neighbors is perfectly safe.

 

[Newby]

Fraternal Benefit Societies like Royal Neighbors, Knights of Columbas, Forresters, Woodmen of the World, etc. do not sell insurance policies.

Insurance policies are issued by insurance companies and are backed by the companies.

Fraternal Societies sell memberships with insurance certificates. The certificates are backed by the members. They have huge cash reserves to operate similar to insurance companies but the bottom line is the members are agreeing to insure each other.

Fraternals also do not participate with state guarantee funds (at least in the USA) and do not have this protection. That is almost a non-issue because agents are required to ignore the existance of the state guarantee funds.

When you become an aget of Royal Neighbors you sign an agreement that you clearly understand this difference. If the company was short of reserves and needed to pay death claims, all the members are supposed to chip in and pay the death claims. The society has the right to pull cash values from all existing policies to pay the current death claims. They also clearly state that they have never done that and never expect to.

So, the bottom line is...if ALL else was equal, I would prefer to be insured by an insurance company that issues an insurance policy. BUT all is not equal if the Fraternal offers better rates or some other attractive terms. All of the Fraternals that I'm familiar with have an excellent record of paying claims.

 

[jdeasy]

Shanendoah issued policies. American General issues policies. Would you rather be with them or RNA or Foresters? If you get coverage thru an employer you get a certificate of coverage.

It's only an issue if you amke it one. If it was an issue to any of my clients, I would just put with AmAM, UHL or Americo. If they wanted to pay more for a policy, they can certainly do that.

 

[ims01]

What do Shenandoah and American General have in common other than when Shenandoah was still accepting business, they both issued policies?

 

[Mark]

Make sure your client knows the difference and the risk with certificates. They are not backed my the reserve funds and if the company goes under, so does your certificate.

 

[jdeasy]

What do Shenandoah and American General have in common other than when Shenandoah was still accepting business, they both issued policies?

Would you want an American General policy right now? Would you want a Shenandoah policy?

The context of the thread was which was better or worse. I would rather have an RNA certificate than a Shenendoah policy, {and I have both, btw}.

The implication by some is that policies are a safer choice for the consumer. I don't think they are.

 

[theinsuranceman]

Would you want an American General policy right now? Would you want a Shenandoah policy?

The context of the thread was which was better or worse. I would rather have an RNA certificate than a Shenendoah policy, {and I have both, btw}.

The implication by some is that policies are a safer choice for the consumer. I don't think they are.

Safety of certificate same as safety of policy...unless the Co. goes under. Then, the policy is by far safer.

 

[jdeasy]

Safety of certificate same as safety of policy...unless the Co. goes under. Then, the policy is by far safer.

I agree. How many companies that offer certificates have gone under vs. how many offer policies?

Ask a Shenandoah client with an annuinty how safe they are feeling. Or one that's trying to access the cash value in a whole life policy how safe they feel.

There may be some companies that offer certificates that have gone under. I only know of Woodmen, RNA and Foresters myself and they have been around since dirt.