- 180
Hey Folks, I just completed a little project that explores the costs our customers pay when they choose to pay fractional (modal) premiums - that is to say, monthly, quarterly, or semi-annual (anything other than annual).
Here's the link: A Table of Fractional Premium APRs in The Life Insurance Industry.
Some of the rates are outrageous when you see them. For example, the effective APR% of Primerica's modal charges for monthly payments is nearly 30%. I did a second survey of small policies and discovered that John Hancock's modal charges for monthly payments on small policies amounts to a 42.8% APR. Yikes.
This is something I did not understand until far too late in my career, so I dramatically underestimated the high costs and rendered less-than-the-best advice. So, I hope you find it helpful as you counsel your clients on which payment mode will serve them the best.
Thanks and please feel free to comment if you have any feedback, good or bad.
Here's the link: A Table of Fractional Premium APRs in The Life Insurance Industry.
Some of the rates are outrageous when you see them. For example, the effective APR% of Primerica's modal charges for monthly payments is nearly 30%. I did a second survey of small policies and discovered that John Hancock's modal charges for monthly payments on small policies amounts to a 42.8% APR. Yikes.
This is something I did not understand until far too late in my career, so I dramatically underestimated the high costs and rendered less-than-the-best advice. So, I hope you find it helpful as you counsel your clients on which payment mode will serve them the best.
Thanks and please feel free to comment if you have any feedback, good or bad.
Last edited: