Western Southern ULs from the 1980s

[bill3173]

Met with a client yesterday to discuss his life insurance. I had him bring out his old policies, so we could see what he had, and I was actually looking forward to it, because I knew some of them were older than a lot of the guys/gals on the forum.

He handed me a Western Southern UL from 1985 and as I was looking it over, I asked for the most recent statement. I couldn't believe how precise these people were in their projections for guaranteed and projected values. I mean they were within a few dollars of the expected and guaranteed values for the current year, and this was done 29 years ago.

My question is were those people at Western Southern that good back then, or was that just a fluke?

 

[scagnt83]

It was most likely just a correctly designed policy and was not underfunded

 

[GAJ638]

Met with a client yesterday to discuss his life insurance. I had him bring out his old policies, so we could see what he had, and I was actually looking forward to it, because I knew some of them were older than a lot of the guys/gals on the forum.

He handed me a Western Southern UL from 1985 and as I was looking it over, I asked for the most recent statement. I couldn't believe how precise these people were in their projections for guaranteed and projected values. I mean they were within a few dollars of the expected and guaranteed values for the current year, and this was done 29 years ago.

My question is were those people at Western Southern that good back then, or was that just a fluke?

om

I would have to look at that current policy status. I find it hard to fathom that an illustration run in 1985 at say 9% at that time actually ran according to projections with much lower interest rates. This policy was probably funded correctly however I cannot see how future projections in 1985 equaled the results in 2014.

 

[scagnt83]

om
however I cannot see how future projections in 1985 equaled the results in 2014.

It all depends on what assumptions were used.

Back then, most companies allowed agents to specify what credited rate they used in their illustration.

The more responsible agents realized that they were in an interest rate bubble and ran illustrations using half reasonable assumptions.

These days illustration software for traditional ULs usually does not allow the agent to play with the rates... sometimes it lets you set the midpoint, but that is about it. Much more regulated these days.

 

[wingateexpress]

om

I would have to look at that current policy status. I find it hard to fathom that an illustration run in 1985 at say 9% at that time actually ran according to projections with much lower interest rates. This policy was probably funded correctly however I cannot see how future projections in 1985 equaled the results in 2014.

Don't you remember the 90's?

I'm surprised it's not more than projected.

 

[GAJ638]

Don't you remember the 90's?

I'm surprised it's not more than projected.

Yes I remember the 90's. I was a District Manager with Western Southern at that time. I remember the interest rates on UL's at that time were 7.25 that was in 1991. I also remember meeting with ticked off policyholders sold a plan in the 80's that did not meet projections. Believe me if you ever saw a UL that exceeded projections with that company you should immediately buy 40 lottery tickets.

That being said, if an agent actually ran a projection at "midpoint" there is a special place in heaven for them. I rarely saw it.

 

[CFP83]

Being in Ohio, (w&s's home state) I've seen countless 1980's UL's from them....NEVER have I came across one that met or exceeded the projections given at the point of sale.
With that said, I can't say I've came across more than two or three 1980's UL's from ANY company that have met projections....and have never saw one that have exceeded them.

 

[bill3173]

Back then, most companies allowed agents to specify what credited rate they used in their illustration.

The more responsible agents realized that they were in an interest rate bubble and ran illustrations using half reasonable assumptions.

There's the answer. I recognized the name of the agent on this policy as having a good reputation. I didn't know him (deceased), but a lot of my older clients have mentioned him with a great deal of admiration.

How do you know so much?

 

[scagnt83]

How do you know so much?

I dont. I only know a lot about a little.

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Being in Ohio, (w&s's home state) I've seen countless 1980's UL's from them....NEVER have I came across one that met or exceeded the projections given at the point of sale.
With that said, I can't say I've came across more than two or three 1980's UL's from ANY company that have met projections....and have never saw one that have exceeded them.

I have never seen an 80s UL that exceeded the original illustration. But I used to work a lot of old Jefferson Pilot orphaned ULs from the 80s. And on rare occasions I would find an old illustration that was run at midpoint. It was usually from the same agents... there were 2 or 3 in this area that ran reasonable assumptions.

But most just ran them at current. And ran Premiums at only enough to cover the current rate....

 

[GAJ638]

Being in Ohio, (w&s's home state) I've seen countless 1980's UL's from them....NEVER have I came across one that met or exceeded the projections given at the point of sale.
With that said, I can't say I've came across more than two or three 1980's UL's from ANY company that have met projections....and have never saw one that have exceeded them.

W/S encouraged rolling over whole life policies into UL's from about 1985 to 1990. Here was the basic presentation new agents were taught. "Mr.Smith you currently have $10,000 in insurance for $25.00 a month. I can take the value from this policy(cash) and roll it into this new policy which will give you $50000 in death benefit all for the same $25.00 a month. Plus at the current interest rate you will have a lot more cash when you turn 65.

Easy sale and the agent was not charged for a lapse and paid full commissions.
A V.P with W/S once told me that the turnover for agents hired between 1985 and 1990 was the highest years because new agents were not taught how to sell. They were taught how to roll business. When the practice stopped the agents left.