Queston for the FE folks

Aug 27, 2008

  1. Winter_123
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    Winter_123 Guru

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    How often do you end out discussing cash accumulation on an FE whole life policy with clients? Firstly, let me say that I understand one of the obvious responses which is that where a policy is intended for final expense, cash accumulation is a minor consideration or not an issue and it is seldom to the clients advantage to ever cash it out. Got that.

    However, the cash accumulation factor is there and does soften the blow a little bit and has reduced paid-up implications etc.

    One of the reasons that I ask is that some of the carriers have an illustration system that just displays all of that and it is there to be discussed if it is relevant- or not if it is not. On the other hand some of the carriers dont have an illustration or print out that shows cash accumulation. Instead it comes as part of the policy which basically means that you have to get the policy to see what you really get and then free-look out of it if it is not acceptable. I dont like that but can work with it where the rates are good if I have to.

    Anyway. The question is: how often does cash accumulation enter into the discussion for you seasoned folks. I would imagine not at all for some or many and that is fine- and again I understand the whole bit about "why would you want to cash it in" etc. Nevertheless, I am asking what it looks like from the seasoned viewpoint, whether that factor comes into discussions regularly.

    Thanks for any comments.

    Winter
     
  2. senior-advisor-indiana
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    senior-advisor-indiana Guru

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    I am not really seasoned in FE but when I sell one I say " THis policy also builds cash values and you can take loans out if needed in the future but most people do not because the cash value doesn't amount to much and it can decrease the value." They say "Oh I don't want it for that." The end.
    94.99% of them have said that.
     
  3. allhealthandlife
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    allhealthandlife Guest

    I think it's a nice little kicker if you market the lower cost FE plans like Oxford. I carry with me examples of cash accumulation from issued policies and say " see the is a 10,000 policy that was issued on a female age 64 who is paying a 34.00 monthly premium and in ten years she will have X amount in cash value , x amount in paid up whole and x amount in extended term.

    If they stick their face closer to that sheet of paper with those numbers on it i know i have them. And believe or not a lot of seasoned citizens can discern between a decent cash accumulation and what they may be getting from Colonial Penn.
     
  4. HoosierDaddy
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    HoosierDaddy Guru

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    I think this is a very good point for new guys. All companies will issue you a "Sample" policy. And there are a couple of big reasons why you want to have that with you. And showing cash values is one. I would say that the need to mention cash values is nothing more than showing the client that they do have control over their policy. And they do have options through their life in regards to their policy. Unlike most of the junk they get in the mail. You never know what part of the presentation someone is going to latch on to, and sometimes the fact that their policy does accumulate “cash values” means a lot.
     
  5. mickeyma
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    mickeyma Guru

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    Since it takes 20 years for the cash values to be adequate, don't bother making a big deal out of them. I don't mention it most times and when I do its, Oh, by the way, if you ever have a small emergency, you can borrow some money from the policy. Prospects are too old to worry about cash value buildup. As one client said, I'll be dead before there's any kind of good buildup in the policy. Since it's whole life and not universal life, you can't overfund it to build up the cash values.
     
    mickeyma, Aug 28, 2008
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  6. karenabcde
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    karenabcde Guest

    It rarely originates from the customer, in my experience. If it comes up, it is if I start emphasizing that "money is growing inside the policy". They like that but they usually say they don't want it for that; they want it to pay expenses so that their family doesn't have to pay them.

    Sometimes I bring it up if they ask how long they have to continue to pay on the policy. If I tell them it is "forever" or "until age 100", then I sometimes use the cv to soften the blow.
     
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