Universal Life Replacment Tips

[nfl72]

In a couple of other threads we were discussing universal life policies and how they can and often do go bad because of lack of funding.

I met with my client from last week today and took a much closer look at his 2 existing UL policies with Bankers life.

He is MNT 71 in great health. He has a 25K policy for $116 per month and a 35K policy at 196 per month. I am kind of at a loss as how to intrepret what he has so I printed off a couple of articles I googled about UL policies on the elderly and he definitely does not want what he has now. I did notice there are surrender charges of $1500 per policy during the first year of ownership and he bought both policies last fall.

Is there anyway around things so he does not have to pay the surrender charge?

His printer was out of ink but he is going to give me copies of both policies within the next day or so. I did look at the illustrations but they are pretty greek to me. Wino, i will keep you in mind when I get the copies and will definetly make things worth your while if I am able to put things together. I did notice the polices talk about booth guaranteed and non guaranteed polices so I don't know what he has. It also does state on the first page of the policy there is a minimum payment and also a target payment which is about $50 per month hhigher than the payments he is making.

 

[WinoBlues]

Buy me a top shelf shot and we are square.

Email me a copy of the original illustrations and or the last annual reports and I will take a look.

In a couple of other threads we were discussing universal life policies and how they can and often do go bad because of lack of funding.

I met with my client from last week today and took a much closer look at his 2 existing UL policies with Bankers life.

He is MNT 71 in great health. He has a 25K policy for $116 per month and a 35K policy at 196 per month. I am kind of at a loss as how to intrepret what he has so I printed off a couple of articles I googled about UL policies on the elderly and he definitely does not want what he has now. I did notice there are surrender charges of $1500 per policy during the first year of ownership and he bought both policies last fall.

Is there anyway around things so he does not have to pay the surrender charge?

His printer was out of ink but he is going to give me copies of both policies within the next day or so. I did look at the illustrations but they are pretty greek to me. Wino, i will keep you in mind when I get the copies and will definetly make things worth your while if I am able to put things together. I did notice the polices talk about booth guaranteed and non guaranteed polices so I don't know what he has. It also does state on the first page of the policy there is a minimum payment and also a target payment which is about $50 per month hhigher than the payments he is making.

 

[Jerard]

Damn UL's is why I got out of the insurance business 20 years ago. I often wonder about the poor saps I sold them to before I knew better....and how long it will be before they blow up at 5 percent less.

 

[RonRoberts]

That is why if you are not going to structure it properly and either put premium at target or overfund by some then you are potentially screwing the customer.

 

[SportsNut]

This is all about the illustrations that accompany the policies. Since he has only had them since last fall he can forget about getting anything back from them in the way of surrender value.

I'm sure Bankers UL policies would rank down the line pretty far compared to any of the leading options so the expense factor and COI is no doubt exhorbitant. The fact that he is paying less than target prem likely means that they will not run forever, but again the guaranteed ledger of the illustration will show you at what age it will lapse. Again, doubting that it is a no-lapse product with Bankers Life, but not familiar with their product.

The other thing of note is, the prem diff between the two policies is $ 80 per month and he only gets another 10K additional covg on that second policy, so it seems that the rate class on it must be different than the 25K policy. So he is paying $ 312 per mo for the 60K UL total now... by comparison he could obtain a 60K GUL that would run to age 100 (assuming best rates) for 180 mo NACLI, 192 mo Genworth, 198 mo Banner. Those numbers go to just over 200 mo if he gets the next best rating avail, and 218 mo for Genworths plan to age 121. If you looked at 100K of covg he could obtain from Protective for 269K mo at the 2nd best rate tier, so you could increase his coverage by 40K and reduce his prem by nearly 40 bucks. All this assumes his insurability at the rate class and his ability to continue to pay prems on a no-lapse type of policy... way diff than an APL feature of a WL policy.

 

[Indy007]

Replace it. I used to work for Bankers, and as of the beginning of 2012 all of their UL's have just a 15yr NLG if they pay the specified premium.

Depending on how price sensitive your client is, the bankers agent may have min funded it just to get the sale knowing it'd be good for 15yrs. If your client has the ability to pay consistently on a policy like Sportsnut quoted, he'd be much better off.

15 yrs only puts this guy at 86, and there's a decent chance he might live longer. If he's got the insurance purely for the db, then go with a GUL. If he wants a whole life policy, RNA's is $270.62/mo for $60k at 71 MNT Standard. He'd save over $40/mo and have WL instead of a non guaranteed UL. If the bankers agent's still working there, be prepared for him to do and say anything to save it.

 

[WinoBlues]

Yeah, I think replacing it is a given. It is about bullet proofing the replacement now and poisoning the well if the Banker's guy come back.

 

[jacobtn]

he needs guaranteed no lapse UL, i'd replace that crap asap. make sure you know what you are doing and present the correct product, illustrated correctly for what he is after.

 

[Newby]

Easiest way is to call the company and have them explain to their customer when the guarantee goes away at current premium.

In my experience when calling Bankers the first people you talk to will not know what they are talking about and will insist that it will never lapse. But when you insist on having that in writing, they crumble and get their manager.

The manager will usually agree that illistration is correct and when the guaranteed column cash goes to zero the policy terminates.

 

[nfl72]

His current policies both say thay have a surrender charge of $1500 in the first year. Will he have to pay that if he cancels the policies?