Sigh. I Hate Running into these

[cjmarka]

Hi everyone

Long-time lurker here. Used to read this forum a lot years ago, but took a break from the gig, and now I am back selling some insurance on the side, so Im glad to be back here, learning from all you guys.

Anyway, got a referral today. 77yr old male who purchased a 15yr Term policy and the term is running out in July. Received a letter from the carrier, informing him that his monthly draft will go from $135 to $1,575 if he wants to keep his coverage of $160,000

Unfortunately, he suffered a stroke 2 years ago, and had a triple-bipass 12 years ago (right after he purchased that term. Too bad it didn't have any of those living benefits!)

I really want to help the guy and put some time into it. His wife sounded so distressed about the whole situation when I spoke to her.

I'm contracted with various companies but not sure where to go from here.

He *might* be able to afford $300-$500/mo at this point but I'm not sure he is going to get very far with that.

Any carrier suggestions for this guy? I have a lot more experience with the 30-50 crowd.

Much appreciated, thanks

 

[DHK]

I take it the policy doesn't have a guaranteed conversion option?

 

[cjmarka]

I take it the policy doesn't have a guaranteed conversion option?

I have not seen the policy yet, I am trying to get them to fax me as much as they can (they are out of state)

But my guess is no. It was a Fidelity & Guaranty Mortgage Protection 15yr Term

But hopefully there is. I'm still waiting to see it

 

[rousemark]

Have a similar situation with an AIG ten year term...The guy's conversion rights ended in March.

 

[cjmarka]

I know there is a time and place where Term is appropriate, but the more and more I run into situations like this where people are interested in permanent insurance after it's too late.

It just solidifies the value of a solid permanent plan. I used to sell a lot of Term and as I grow older I am starting to feel guilty I didn't press for a permanent solution more often.

 

[bsdavis]

Yeah, these kinda situations just make me ache for the insured because you want to help but don't know if you can. For my practice, I have always made it a point to note what conversion terms are for the policy and then go back regularly and re-touch on it. Everybody knows someone who has had heart problems or cancer or something and you just have to catch them when it is top of mind.

Good luck! I hope you can help them.

 

[BMC]

Hi everyone

Long-time lurker here. Used to read this forum a lot years ago, but took a break from the gig, and now I am back selling some insurance on the side, so Im glad to be back here, learning from all you guys.

Anyway, got a referral today. 77yr old male who purchased a 15yr Term policy and the term is running out in July. Received a letter from the carrier, informing him that his monthly draft will go from $135 to $1,575 if he wants to keep his coverage of $160,000

Unfortunately, he suffered a stroke 2 years ago, and had a triple-bipass 12 years ago (right after he purchased that term. Too bad it didn't have any of those living benefits!)

I really want to help the guy and put some time into it. His wife sounded so distressed about the whole situation when I spoke to her.

I'm contracted with various companies but not sure where to go from here.

He *might* be able to afford $300-$500/mo at this point but I'm not sure he is going to get very far with that.

Any carrier suggestions for this guy? I have a lot more experience with the 30-50 crowd.

Much appreciated, thanks

With his life expectancy on the seemingly shorter side, you might be able to find a settlement company that would be willing to take on those higher premiums.

 

[VolAgent]

With his life expectancy on the seemingly shorter side, you might be able to find a settlement company that would be willing to take on those higher premiums.

It wouldn't hurt to look, but I doubt he will find an offer or an attractive one.

Even if he only got 10 cents on the dollar, or $16,000 for the policy, break even is in 7.6 years. That assumes the premium won't increase further, which I'm sure it will. Also, that ignores any commission to the settlement broker, costs of administration and profit.

When accounting for all that and increasing premiums, I would guess his life expectancy would need to be 4 years or so with fairly high confidence. Depending on how he has done since the stroke, he could easily live many more years.

So again, absolutely no harm in looking, but I wouldn't get his hopes up either.

 

[cjmarka]

With his life expectancy on the seemingly shorter side, you might be able to find a settlement company that would be willing to take on those higher premiums.

You know what... thats not a bad idea. I'm vaguely familiar.

Any recommendations as to who to reach out to? I will run the idea by the client and see what he thinks

Thanks for the idea...

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It wouldn't hurt to look, but I doubt he will find an offer or an attractive one.

Even if he only got 10 cents on the dollar, or $16,000 for the policy, break even is in 7.6 years. That assumes the premium won't increase further, which I'm sure it will. Also, that ignores any commission to the settlement broker, costs of administration and profit.

When accounting for all that and increasing premiums, I would guess his life expectancy would need to be 4 years or so with fairly high confidence. Depending on how he has done since the stroke, he could easily live many more years.

So again, absolutely no harm in looking, but I wouldn't get his hopes up either.

I wonder if I were able to find a carrier who would approve this client for say, a WL or GUL...and get the premiums down to the $900-$1200 range... I wonder if that would make it more attractive for a settlement.

Of course, I'd probably have to disclose that information on the application, and would be rejected. I assume

 

[VolAgent]

I wonder if I were able to find a carrier who would approve this client for say, a WL or GUL...and get the premiums down to the $900-$1200 range... I wonder if that would make it more attractive for a settlement.

Of course, I'd probably have to disclose that information on the application, and would be rejected. I assume

To the best of my knowledge, no one will buy a policy while in the contestable period. So even if you could get him approved for such a policy, no one would buy it.

Depending on everything, you could easily put him in an FE policy for $25,000 for well under $300 month. Obviously depending on tobacco use, state, companies available to you and any other health concerns.