SINGLE PREMIUM LIFE

[playball41]

Been hanging around in this business for 2 years now totally on my own selling mostly final expense, some UL, children's whole life, and mostly lately 30 year term w/rop all thru MOO (Mutual of Omaha).
I am very curious to learn about SP life. Doing my research on the workings of this type of policy but wondered how is commission paid? i have 100-110% contract. I'm guessing commission is paid based on some kind of first year portion of the single premium. Anyone care to educate me a little?

 

[Baseball7]

Generally 12% or far less on the premium

 

[Newby]

Been hanging around in this business for 2 years now totally on my own selling mostly final expense, some UL, children's whole life, and mostly lately 30 year term w/rop all thru MOO (Mutual of Omaha).
I am very curious to learn about SP life. Doing my research on the workings of this type of policy but wondered how is commission paid? i have 100-110% contract. I'm guessing commission is paid based on some kind of first year portion of the single premium. Anyone care to educate me a little?

Single premium pays either a percentage of the premium, or a premium of the face amount depending on the company.

 

[WinoBlues]

SP generally will pay a percentage of the premium unless PreNeed which are paid on face. Which are going to be smaller premiums

 

[Allen Trent]

Pays more similar to Annuity like comm. Best performing SP policies for client likely pay 4-8% of premium paid. Worst performing policies that have no dividends or no PUAR funds likely pay highest comm like 10-12% or more. Kind of like the higher the Annuity bonus to client, the longer the surrender charge ends up paying the agent the highest comm. Not always, but many times.

 

[Todd King]

Been hanging around in this business for 2 years now totally on my own selling mostly final expense, some UL, children's whole life, and mostly lately 30 year term w/rop all thru MOO (Mutual of Omaha).
I am very curious to learn about SP life. Doing my research on the workings of this type of policy but wondered how is commission paid? i have 100-110% contract. I'm guessing commission is paid based on some kind of first year portion of the single premium. Anyone care to educate me a little?

Even though you didn't ask, I'm going to point something out to you anyway. If you can find a way to market these plans you'll be about the 1st one in history. These are something that you have to look for an opportunity while you're in the house, for the most part.

You're going to be looking for CD's and multiple life policies on the insured. That's where you're likely to find a use for single premium.

Someone mentioned upwards to 12%, but we have one paying as high as 15.5% (street level).

 

[Allen Trent]

Someone mentioned upwards to 12%, but we have one paying as high as 15.5% (street level).

Agree with you that they are tough to market & are a relationship sale when you are in the house to find the lazy money they hope to only need for an emergency.

I am thinking I would hate to see the cash value performance of the one paying 15.5% commission. I tend to like the cases that the cash value can also outpace CD rates as much as possible & ones that allow 25%-75% of the total money to be in PUAR so the client has liquidity access should they ever need it without having to borrow from it or surrender the entire contract like many are designed.

If the senior population understood the concept of SPWL, there would be a line at our doors of people wanting to put a portion of their lazy bank money into SPWL as it usually hits on all the persons goals with their lazy money.

 

[Newby]

Even though you didn't ask, I'm going to point something out to you anyway. If you can find a way to market these plans you'll be about the 1st one in history. These are something that you have to look for an opportunity while you're in the house, for the most part.

You're going to be looking for CD's and multiple life policies on the insured. That's where you're likely to find a use for single premium.

Someone mentioned upwards to 12%, but we have one paying as high as 15.5% (street level).

Agents who have worked pre-need are much more comfortable than most other FE agents at asking for (and getting) single premiums. With pre-need sales you learn real quick that the lady who can’t afford a $50 monthly premium will often not balk at all at writing a one time check for $5000 or even $10,000. It makes perfect sense to them even though it defies logic of an agent who hasn’t experienced it before.

These aren’t your debit express people of course. But your low income people who have a meager small home and a car are often in this group.

They see any new monthly bill as coming out of their already tight monthly cash flow. Nope, they can’t afford it.

But when you introduce the concept of a single payment in full that comes from a whole different place. And sometimes they have a whole nest egg that has been set aside for years just for their funeral. You just show them how to get more out of it with the single premium policy.

It’s not like a good agent running FE leads is going to run into one of these every week. But if you aren’t selling two or three of them a year off your FE leads you are not asking the right questions when the signs are all there. And many times the sign is as obvious as the person saying, I don’t need insurance because I have money in the bank.

 

[Baseball7]

I don’t need insurance because I have money in the bank.

....and you say?

 

[Allen Trent]

I don’t need insurance because I have money in the bank.

....and you say?

I agree you don't "need" it, but most clients in your situation "want" their money to do everything that a MEC SPWL does.

Money at the bank that issues a 1099 each year plus it may have to go to probate upon their death as most bank CDs don't have a beneficiary listed. With a MEC SPWL, there is no 1099 each year unless you choose to take funds out, it bypasses probate by listing beneficiaries, it will pass 1.5 to 4x the amount of money in the account tax free as a life insurance death benefit. Bank Funds provide no leverage, when you die, only the account value is paid out by the bank & creditors may get first dibs if it has to go through probate. If you later need a lifetime income or a Medicaid Spendown plan, the funds can be annuitized to pay the client over a period of years.

If all seniors understood this & more agents understood it, there would be a line at the door wanting to place the "excess" bank money into MEC SPWL. you should keep whatever amount of funds that help you sleep at night in the bank and the excess possibly in MEC SPWL if you are healthy enough to qualify. Insurance companies can lose a lot of money if you allow you to buy this & have to pay the claim soon after, that is why you have to be insurable for this type of plan.