Whole Life Customer Wants Replacement, Help Please?

Discussion in 'Life Insurance Forum' started by AOKING, Jun 15, 2017.

  1. AOKING
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    AOKING Well-Known Member

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    Client will turn 65 in less than a month. Non Smoker, type 2 but under control, good height and weight, most likely placed standard on a replacement. 100k in death benefit.

    17k in cash value. Looking for 1035 of cv and replacement with GUL. LTC rider would be fantastic. Anybody have any good ideas? I want to make sure I'm not just getting quotes from my IMO's favorite carriers.

    Thanks,

    AO
     
  2. LGilmore
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    LGilmore Well-Known Member

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    You'd better know for sure in advance he'd get a standard. What does he have, what are you offering that improves the situation without increasing risk?
     
  3. AOKING
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    AOKING Well-Known Member

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    The client has a fantastic massmutual whole life paid till 100 contract (client has had for 7 years). Premium after dividend offset is about 2400 a year. I do not want to replace, but this is the third year I have had to "re-sell" him on the contract and I am afraid if I don't replace it with in his terms "a non cash value policy with lower premium" he will eventually cancel it or replace it without me.

    He is very flamboyant and not afraid of contacting insurance agents right out of the phone book. He told me the other day that he was offered a nice policy for $75 a month (we all know that is a crock and I could blow it up if I could see the quote, but I am afraid someday he won't give me that opportunity. I am looking to give him what he wants).

    I am thinking about three different options:

    Replace with GUL and 1035....Looked at this last year, premium around 1500 a year.

    Take the paid up option because the client acts like he does not need anymore insurance (although the family would disagree)

    Replace with State Life if we can get some decent LTC benefits (the family is interested in that and the client may see the value there instead of the Death Ben)
     
  4. Whirleybird
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    Whirleybird Well-Known Member

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    After 7 years his C/V should be increasing at a higher $amount than his premium right?
     
  5. AOKING
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    AOKING Well-Known Member

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    Not quite but close. We have been using dividend offset for 3 years and cash value is increasing by the amount that he is writing a check for each year after the dividend offset (that is what makes it so frustrating). He also can afford it too (it is not a cost issue), he just hates writing the check.

    We looked at a GUL replacement last year, but after 1035 of cv, it still would require $1,500 in premium per year. Not that much less than his $2700 premium per year (after dividend offset) and no equity on the balance sheet with the GUL. Also, on the non guaranteed side, his premium should be less every year due to dividends.........
     
  6. WinoBlues
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    WinoBlues Well-Known Member

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    Frustrating yes. However, at the end of the day he is grown and wants what he wants. Give it to him or someone else will.
     
  7. VolAgent
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    VolAgent Well-Known Member

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    Exactly.

    It is a 7 year old policy, unless you have a bonus riding on it, who cares what he does with it. Sure, it probably is not in his best interest, but he has a right to be stupid. If he wants to pay you again to get a new policy, help him do it. Just make sure to thoroughly document the replacement and why. I'd probably even make him write out in his own words on a separate sheet of paper why he wants to do it. Make him hand write and sign it.

    He might just change his mind then, and if he doesn't then you are golden as far as the replacement goes.
     
  8. Whirleybird
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    Whirleybird Well-Known Member

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    This right here. But I'd put him in the dues conversation. "You're already at the point to where you've paid the upfront dues in the policy, and to be honest starting over at a higher age may not be in your best interest. But if that's really what you're intent upon doing, here are some options for you"

    Just remember to HEAVILY CYA in case he comes back on you with a lawyer. Worst case scenario, you lose a difficult client after having been paid on him for 7 years.
     
  9. VolAgent
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    VolAgent Well-Known Member

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    I hear you on both points. That is why I think I would make this guy write it out in his own words and sign it. That should pretty well eliminate the attorney down the road. Oh, sure he can go get one, but that letter should hopefully take all the wind out of his sails.
     
  10. LGilmore
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    LGilmore Well-Known Member

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    As you describe it, I agree with others here in document document document. Let's say you replace your business and several years go by. Things don't go well and suddenly it was your idea to swap out the now great policy for the stuff you sold him....

    I still say pre underwrite so see if someone will make him an offer. Do that and then you'll know for sure what you can or can't work with, as will he. if he's done this 3 years in a row, it may be for attention. Figure out if anybody will make him an offer better than what he has. Then proceed accordingly.
     
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