Worried about Fully Underwritten Plans

[BiggitySwat]

Re: Worried about Fully Underwritten Plans....

This is obviously a NAA agent who is trying to make it on the leader board. This is the temptation for a newby agent who is spending a ton of $$$ on leads and has no clue about the legal implications of a client dying of a pre-existing condition not listed on the application or one who simply doesn't care about his client. He will eventually crash and burn then be thrown under the bus. I agree, do the client a favor and try do get a decent policy issued that will stand up to underwriting scrutiny.

The NAA agent who did this wrote the policies in 2006. Since it is now 2008, OMFN told me that the policies will stick, even if they know the apps were cleansheeted. However, the clients still want to get rid of them because total annualized premium for all 3 simp policies totals about $1,200.00 in premium a month, and will lapse in 13 years.

By comparison, assuming they get "Standard" ratings with my Aviva policies, total premium will be $815 a month, for the identical coverage, except both policies have Lifetime NLG riders, a bit of cash value for emergencies, and will be guaranteed to cash out until age 120.

And no, the agent's not some 19 year old kid wanting to make 1 million by 21 via building an NAA agency. He's a thirty-something sales veteran who is one of the top OMFN salesmen in the NAA. He knew what he was doing, and he added the ROP rider to the policies, which nearly doubled the premiums for each one. They did not have a desire or want for ROP, either - they did not know he did that. This kind of goes against the NAA/Primerica/AL Williams doctrine of "buy term invest the rest," because they could have easily took the $500/mo going into the ROP/Extended premium guarantee riders and slapped them into an Oppenheimer Mutual Fund

 

[SportsNut]

Re: Worried about Fully Underwritten Plans....

assuming they get "Standard" ratings with my Aviva policies, total premium will be $815 a month, for the identical coverage, except both policies have Lifetime NLG riders, a bit of cash value for emergencies, and will be guaranteed to cash out until age 120.

With the health conditions that you describe for the proposed insured, standard isn't likely to happen. You could be looking at a Tbl 4 to 6, if insurable at all. The premium that you project isn't going to work quite that way.

You should get some assistance from a special underwriter at a brokerage firm that you deal with. If you don't alredy, you should find one who has the expertise with such things before you go off and get yourself in trouble here. This case is NOT about premium first, but about obtaining suitable coverage at all; then secondly about the cost of same. If only it were that simple...

It may boil down to the fact that they are better off where they are currently (due to the slcik appl submitted) and that there is nothing you can do to improve on their situation. Best to know that in advance.

 

[jdeasy]

Re: Worried about Fully Underwritten Plans....

Yes, or a UL, EIUL, etc.

The reason why the clients did NOT go this route in the beginning was because they were hard-sold three 15 year simp issue term policies in the beginning and did not know it would run out in 15 years. Also, they were/are completely willing to take a para-med if it meant substantial savings on their premium - but they didn't even know they had that option!!! (They were surprised when I asked them to take a para-med for their UL policies).

FYI, the agent who wrote this was an NAA agent who flew in from another state, wrote a bunch of business, then flew back home. The clients have not heard from him in 2 years, and he is ignoring/not returning their calls. Though I still know he is active because he was listed on an Old Mutual leaderboard as one of the top OMFN national salesmen last month.

His commission was approximately $10,000.00.

The policies do not "run out" or lapse in 15 years. All of OM's term policies are term to age 95. Their premium will go up in 15 years, but, they will not lose their policy, unless they were 80 years old when they got them.

If the ROP was not wanted and not wanted now, they can have it removed from the policy and put that $500/mo in their pocket. I had an OM client take his ROP rider off just last year. It's no problem at all to remove the rider. Of course, they will lose what they have already paid for the rider, but, they would anyway if they replace the policies.

It's a bit hard to believe that people paid that much for something they didn't want or know about. The agent may not be alone in not giving full disclosure.

 

[BiggitySwat]

Re: Worried about Fully Underwritten Plans....

The policies do not "run out" or lapse in 15 years. All of OM's term policies are term to age 95. Their premium will go up in 15 years, but, they will not lose their policy, unless they were 80 years old when they got them.

If the ROP was not wanted and not wanted now, they can have it removed from the policy and put that $500/mo in their pocket. I had an OM client take his ROP rider off just last year. It's no problem at all to remove the rider. Of course, they will lose what they have already paid for the rider, but, they would anyway if they replace the policies.

It's a bit hard to believe that people paid that much for something they didn't want or know about. The agent may not be alone in not giving full disclosure.

Ya, you're right. They are definitely holding onto their OMFN term for now while we try to get them approved with Aviva, so at least if they get decline/rated, they have something to protect them.

But hey, I'm curious at what the underwriters will say. There's always a chance that they'll look into this further and nudge him into "standard."

 

[Mark]

Re: Worried about Fully Underwritten Plans....

Just call your companies underwriting dept and they will tell you what class to write them. THis will save you a lot of time. Also go ahead and have all the meds written down and try and give the company as much details as you can.