The Sale

[James]

Well you weeded me out, I'm very much a "Sell Term then Convert" type of guy. Yet though as I first noted I had trouble figuring out a way to stipulate my theory of the Initial Sale, I didn't want it to boil down to yet another Term Vs WL discussion.

Yet though, I figure most everyone would figure out that the 1, 5 or 10 year term would mean that in future visits would have some type of conversion scenario. Yet though I would take difference if you are suggesting that 20 or 30 year term policies have Conversion ability built in, most do not and the ones that do will at the most allow a ten year mark to convert, most are far shorter then 10 years, no way will Carriers today take that type of risk with underwriting that far out.

 

[Winter_123]

Yet though I would take difference if you are suggesting that 20 or 30 year term policies have Conversion ability built in, most do not and the ones that do will at the most allow a ten year mark to convert, most are far shorter then 10 years, no way will Carriers today take that type of risk with underwriting that far out.[/quote]
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I still don't see it yet. If I were to just quickly think of a couple carriers that are highly competitive on term insurance, then I might think of Genworth and West Coast (these are just examples, each company has its niche yadada, yadada, and smokers versus non smokers and so on). On a 30 year term Genworth policy the conversion privilege is 30 years. For West Coast it is 20 years.

Even if I were to look at a product that had only a ten year term conversion, I am at a loss trying to understand how it would help to move them instead into a 1 or 5 year term product. How is a 1 year conversion privilege better than a 10 year one? I understand how 30 is better than 10.

I follow that the 1 year term gives you a chance to go by every year to work additional sales but I am trying to think of how it helps the policyholder. If you are with the client talking about final expense, retirement, long term care, disability etc that also gives you a basis to be talking to them about conversion too. I understand that in a 30 year policy that their coverage would not be going off a cliff every year so it takes that urgency out of the discussion but so be it.

Winter

 

[James]

I follow that the 1 year term gives you a chance to go by every year to work additional sales but I am trying to think of how it helps the policyholder. If you are with the client talking about final expense, retirement, long term care, disability etc that also gives you a basis to be talking to them about conversion too. I understand that in a 30 year policy that their coverage would not be going off a cliff every year so it takes that urgency out of the discussion but so be it.

Winter

Once again, I was describing the first meet with what I consider my average client. Hopefully I can come up with a plan within a year of working with any client that will cover them for their life with the ability to adjust coverage and that is likely in a downwards direction for the term part of the equation. Some how you decided or I mis communicated the idea of the ART to be used year in and year out, that wasn't what I meant. Yet though I rarely find the need for the 30 year term policies, I find my average client starting out is around 40. I'm not a strong believer of the idea or strategy of "Income Replacement", in most cases I find that simply isn't needed nor really desired by the client.

 

[Winter_123]

Once again, I was describing the first meet with what I consider my average client. Hopefully I can come up with a plan within a year of working with any client that will cover them for their life with the ability to adjust coverage and that is likely in a downwards direction for the term part of the equation. Some how you decided or I mis communicated the idea of the ART to be used year in and year out, that wasn't what I meant. Yet though I rarely find the need for the 30 year term policies, I find my average client starting out is around 40. I'm not a strong believer of the idea or strategy of "Income Replacement", in most cases I find that simply isn't needed nor really desired by the client.

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Alrighty then, you have defined your strategy. Let us hope that mom and the kids agree that income replacement wasnt needed if dad dies and he is the only earner in the household.

Winter

 

[James]

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Alrighty then, you have defined your strategy. Let us hope that mom and the kids agree that income replacement wasnt needed if dad dies and he is the only earner in the household.

Winter

I rarely run into a one income household today, and of course if I do I would adjust my thinking to do the best for them. You are starting to sound like someone that is only out to take pot shots, I've tried to handle this with some good nature but it's looking like that may not be possible much longer. So tell us, exactly what kind of Fiduciary and Suitability work to you do for your clients? Maybe ask them how much they make a year and sell a 20x factor and nothing else matters? It starting to sound that way, if not please provide some information if you can.

 

[Winter_123]

I rarely run into a one income household today

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This is because it takes two incomes to get by in most instances.

Winter

 

[Crabcake Johnny]

No....it takes two incomes to get by with the lifesyles we want. Our parents and grandparents didn't have two car payments, weren't in credit card debt, didn't buy more house then they could afford, and didn't need the latest Ipod.

 

[djs]

and didn't need the latest Ipod.

That's true, but they did have a flat screen to watch movies on.... It was the sheet you hung between 2 trees to use as teh screen for the movie projector for the home movies...

And also, their parents / grandparents told them that they didn't buy any cars and didn't need running water in the house, and grew all of their own food.

I'm happy to be living now, not then

Dan

 

[Winter_123]

That's true, but they did have a flat screen to watch movies on.... It was the sheet you hung between 2 trees to use as teh screen for the movie projector for the home movies...

And also, their parents / grandparents told them that they didn't buy any cars and didn't need running water in the house, and grew all of their own food.

I'm happy to be living now, not then

Dan

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Whoa, we are not talking the 1800's here. I am 57 and most people here are younger so their parents would be of even more recent vintage than mine. Nevertheless, my parents were working and raising a family in the 50's and 60's. Don't kid yourself. The economy in that period right after WWII was great. One person, on one income could raise a family, buy a house, save for retirement, buy a little piece of land for next to nothing, and you would have a TV and before long a color TV. The whole bit. As far as cars go- There were plenty. Roadsters, Model A's converted to road machines, big fins, magnificent road tripping gas guzzles or you could go in the other direction and get a used VW for a few hundred bucks and live the good life for very little. Music was good too. In addition, many of us also grew up on a farm so had connections into rural life and earlier times and that is not all bad either. I am not saying that one is better than the other but don't kid yourself, there was life before this frigging rat race of an economy and internet culture society and some of that life was very decent, affordable, and fun.

Dennis

 

[Crabcake Johnny]

It can be done:

Monthly bills - sample

Mortgage: $2,000
Car payment: None - own your car
Food: $200
Utilities: $150
Gas (car) $200
Cable/Phone: $100
Car insurance: $150
Credit cards: Zero - don't charge anything
Kids: $200 (school crap, clothes, etc...)

Total: $3,000 per month.

Now, this would be the most basic of bills. But if you have a place to live, food, a car and utilities/phone then anything else is added on. You'd need to take home $36,000 to break even and at 25% for taxes that's around $47,000.

That means if you have one bread winner making $60,000 - $80,000 or more in theory you're rolling around in money with one income. Obviously if you're making less than I'd say $50K you really can't swing it too well on one income.