Selling Final Expense

[jdeasy]

Thanks for the reply JD.

As I mentioned I am not a FE agent. I write 5-10 a month. And those are on the type clients you mentioned. Not based on age.

We have a few FE agents in my area that write everyone FE. Age 8-80. They do not know how to write anything else or are just hit and run salesmen.

I would not replace a FE product on the type clients you are talking about unless it was with a lower cost FE policy. But have on the more typical retirees. Pension, homeowner, savings etc. And sometimes it is with a GUL. Especially on a UL rescue with a 1035. Many times I can take the same premium and short pay it.

I have learned a lot from you and Newby on FE and Pre-need. Also using your tip on referring MoO on GI, I have gotten a lot of referrals.

You mentioned you replace GULs with whole life. How do you do the comparison?

Thanks

Most of the ones I have replace have been just regular old UL. In most every case there has already been a problem with increasing premium and/or reducing DB and the person is already sold on getting rid of it.

I had a GUL yesterday that I replaced. The lady had it for 5 years paying $65/mo for a $50,000 db. It was guaranteed to age 94. She had taken a $500 loan against the cv. They had informed her that the guarantee was now to age 91 and that, if she took any more loans, they would cange the age again.. I'm not sure that's how the discussion went with the company, but, that's wht she and her fiance both insisted they were told.

I put him in a $50,000 whole life for $94/mo. They guarantees sold it for me. They said that's exactly what they were looking for and had already talked to 3 agents. Mine was just the best priced. They said they never wanted to see another policy with "projections" on it.

I really don't run into many GUL's. Like I said, most of my clients don't have anything to replace.

 

[Fisher]

They said they never wanted to see another policy with "projections" on it.

Ditto that. When I'm showing an 'actual' FE prospect what their options are I never even mention cash values. That being said I will propose an underwritten (non -SI) plan if their health warrants it and have them sign the illusion as just another piece of paperwork. Most of these folks don't want to be confused.

 

[retread]

Ditto that. When I'm showing an 'actual' FE prospect what their options are I never even mention cash values. That being said I will propose an underwritten (non -SI) plan if their health warrants it and have them sign the illusion as just another piece of paperwork. Most of these folks don't want to be confused.

"illusion"!!!.... I love it! I, too am a believer that a life or annuity illustration is just an illusion....

 

[ScottLFB]

Newby is right about the No Lapse Guarantee UL.. Run a few quotes.. The No Lapse Rider is so expensive that it's best used for wealth transfer because it eats up your cash value to pay for the cost of insurance on the inflated Face Amounts.

Another thing I haven't seen you guys talk about is Funeral Trusts. Everybody talks about the lowest cost Final Expense policies, but nobody talks about protecting the cash value when your "poor/non-wealthy" clients (I say poor as a loose term as many agents say their clients can afford more than $30-40/mnth and have no assets) have to qualify for a LTC facility and their CV in those FE policies all have to be spent down to state Medicaid Guidelines... Now your $30/mnth client has paid 6-9yrs for a $10K Face policy that's now only worth $1500-2000...

 

[WinoBlues]

Newby is right about the No Lapse Guarantee UL.. Run a few quotes.. The No Lapse Rider is so expensive that it's best used for wealth transfer because it eats up your cash value to pay for the cost of insurance on the inflated Face Amounts.

Another thing I haven't seen you guys talk about is Funeral Trusts. Everybody talks about the lowest cost Final Expense policies, but nobody talks about protecting the cash value when your "poor/non-wealthy" clients (I say poor as a loose term as many agents say their clients can afford more than $30-40/mnth and have no assets) have to qualify for a LTC facility and their CV in those FE policies all have to be spent down to state Medicaid Guidelines... Now your $30/mnth client has paid 6-9yrs for a $10K Face policy that's now only worth $1500-2000...

What?

>> Run a few quotes.

The numbers I showed were from illustrations and based on guarantees. Not speaking on which products are best for a specific client. But the numbers are the numbers.

 

[ScottLFB]

What?

>> Run a few quotes.

The numbers I showed were from illustrations and based on guarantees. Not speaking on which products are best for a specific client. But the numbers are the numbers.

Sorry for the confusion.. Wasn't talking about your specific quotes.. I was referencing to run a few different quotes with the products (such as Aviva or North American) that offer the No Lapse Guarantee Rider so the Agent could see the cost of the Rider as it eats at the CV in the policy and the reason behind why these specific products aren't the best for FE planning..

 

[jdeasy]

Sorry for the confusion.. Wasn't talking about your specific quotes.. I was referencing to run a few different quotes with the products (such as Aviva or North American) that offer the No Lapse Guarantee Rider so the Agent could see the cost of the Rider as it eats at the CV in the policy and the reason behind why these specific products aren't the best for FE planning..

That's not why UL is not good for FE. It has nothing to do with current costs. It's about the guarantees and what happens when they miss payments and let it lapse and want to get it reinstated. It's about what happens to the guarantees of a GUL if they take a policy loan.

 

[WinoBlues]

Sorry for the confusion.. Wasn't talking about your specific quotes.. I was referencing to run a few different quotes with the products (such as Aviva or North American) that offer the No Lapse Guarantee Rider so the Agent could see the cost of the Rider as it eats at the CV in the policy and the reason behind why these specific products aren't the best for FE planning..

If Cost and CV are problems why not issue a policy that does not have CV and is lower cost? Seems contradictory.

I do take your point on the trust though. And JD's point about APLs is my experience with that market also.

I do not see FE products as a market as much as I see the products as just life insurance. Same as Mortgage, collage, income replacement, credit life or pension max. Call it what you want. It is just life insurance to me. I sell what the person needs to qualify for coverage. Young, old, rich or poor.

I recently issued a GUL on a 73 year old lady and a "FE" product on a 48 year old lady. Also an FE on a 20 year old and a term policy on 61 year old. Different needs covered by different policies. All were replacements.

 

[VolAgent]

No lapse UL never was designed for cash accumulation. I've seen a few policies that try to have the no lapse feature and cash accumulation. It isn't particularly good at either.

No lapse UL is designed to generate as much pure death benefit for a little premium dollar as possible. For the most part, NL UL has all the pros and cons of term when compared against WL and cash accumulation UL. Apparently the biggest negative in the FE market is that there is no cash value to borrow against in case of a missed or late premium.

 

[WinoBlues]

No lapse UL never was designed for cash accumulation. I've seen a few policies that try to have the no lapse feature and cash accumulation. It isn't particularly good at either.

No lapse UL is designed to generate as much pure death benefit for a little premium dollar as possible. For the most part, NL UL has all the pros and cons of term when compared against WL and cash accumulation UL. Apparently the biggest negative in the FE market is that there is no cash value to borrow against in case of a missed or late premium.

Agreed, However if you use the same premium it is petty rich in values. I understand what they mean by the "type" of people that they get lead cards from in general.