What Is The True Percentage Of Term Policies That Pay Out?

[KenoKat88]

Wow only 2%! While we are on the topic, does anyone know the % payout on Universals that do not have a no lapse gaurantee?

 

[0b1kanobee]

About 2% and of those most are from accidents and not health related.

Mark, is this number excluding terms that were replaced, converted, cancelled, and anything else that could happen with a term?
Do you understand the number/percentage I am asking for? You have to read my original post VERY SLOWLY because I'm not seeking that % that everyone throws out there all the time with term.

 

[VolAgent]

Here is a better question. What percentage of term policies are converted, replaced, lapsed or cancelled in the first 75% of their life?

I bet not many make it that long, and then how many of those ever pay out?

 

[bluemarlin08]

In addition, I wonder what % of permanent policies pay a death claim?

 

[KenoKat88]

Well knowing that actual number can help you and it can hurt you. I'm looking at a case where there is a lot of term too and I see a good fit for GUL.

I'm not pro-term or anti-term and same with WL. I think there is a place for everything. I have term myself.

I just can't stand statistics which are extremely flawed. I don't mind slightly flawed. But the main statistic I see on term is flawed.

For instance if you tell a prospect that only 3% or so of term policies pay and you make it clear it's not because the insurance company doesn't want to then you have to overcome the objection of "well I'm gonna pay mine. I'm not going to convert. I'm not gonna replace with something cheaper because I'm getting older. ect. ect."

I am really liking GUL lately. I think it gives good bang for the buck and it's permanent, at least if they don't live past 105 or so.

I agree, I think there is pro and cons to both. I personally don't sell term because I'm captive and the term we have is very expensive. I would rather sell a small WL and have them find term somewhere else if they need it. I feel term is good for some things, but it should not be the clients only source of life insurance. I usually look at the policy and calculate the COI after the term is over. One client was looking at $300 per month to renew, so of course she signed up with a WL, for funeral expenses and kept the term for mortgage and income protection.

 

[VolAgent]

In addition, I wonder what % of permanent policies pay a death claim?

100% of those that don't lapse, aren't replaced or surrendered.

 

[0b1kanobee]

Here is a better question. What percentage of term policies are converted, replaced, lapsed or cancelled in the first 75% of their life?

I bet not many make it that long, and then how many of those ever pay out?

I understand where you are going with this but it's possible they are cancelled, replaced, lapsed at any point and another term is purchased. Then we go around in circles again.

I still would like an answer to my original question however I don't think anyone really knows. I do think it is somewhere around that 2% mark that Mark mentioned if I had to guess.

Perhaps I'm looking for a statistic which does not exist.

 

[VolAgent]

I understand where you are going with this but it's possible they are cancelled, replaced, lapsed at any point and another term is purchased. Then we go around in circles again.

I still would like an answer to my original question however I don't think anyone really knows. I do think it is somewhere around that 2% mark that Mark mentioned if I had to guess.

Perhaps I'm looking for a statistic which does not exist.

It is not only possible, but likely. It still counts. A term policy is a term policy.

You are trying to narrow it down too much. "Of term policies that pay a death benefit, what percentage paid a death benefit?"

There are two valid questions. Of term policies, what percentage ever pay a death benefit? Of term policies that are not lapsed, replaced or cancelled within the first X% of their life, how many pay a death benefit? The second number will be higher than the first, but I bet it is still low.

 

[0b1kanobee]

It is not only possible, but likely. It still counts. A term policy is a term policy.

You are trying to narrow it down too much. "Of term policies that pay a death benefit, what percentage paid a death benefit?"

There are two valid questions. Of term policies, what percentage ever pay a death benefit? Of term policies that are not lapsed, replaced or cancelled within the first X% of their life, how many pay a death benefit? The second number will be higher than the first, but I bet it is still low.

So what is it? Inquiring minds want to know!!

 

[bluemarlin08]

100% of those that don't lapse, aren't replaced or surrendered.

Thanks for the answer, should have thought of that. Maybe you could help me a little more, what % of permanent policies are lapsed, replaced or surrendered. Thanks in advance.