Term Conversions

[Sam]

I am not vouching fr Banner per se, but AIG, West Coast Life, First Colony and other of the cheapest term companies out there, also have some of the cheapest UL's, and secondary guarantees on the market.

 

[James]

I am not vouching fr Banner per se, but AIG, West Coast Life, First Colony and other of the cheapest term companies out there, also have some of the cheapest UL's, and secondary guarantees on the market.

Okay, so we are back to the cheapest, as in cheapest is the best or just the cheapest? Yet the best contracts out there for Pernement Coverage is going to be found with companies like Guardian, NYL, MM, Mutual Trust etc etc, so you have a choice, peddle the cheapest or the best. It seems to fall that way, you can sell the cheapest or the best or better. Now don't get me wrong do it either way that suits you, I'm not going to say that a AIG contract isn't worth it, it most certainly is or even First Colony but they simply don't measure up to the big Mutual Companies of course IMHO.

 

[NHB_MMA]

I have found that this is a common trick used by some captive companies, when trying to explain why their product is so much more expensive, they claim that all the "internet selling, new age crap, can never be converted", which is of course, a blatant lie.

I haven't heard anyone say that, but I don't doubt that some have, given what I've seen from some various agents over the years. I don't think it's so much that, but who in their right mind would buy a permanent policy over the internet? I want someone in a local office I can call at any time with any questions that will sit down and show me illustrations, options, etc.--not an 800 number.

Personally, I would be hesitant to buy permanent insurance from anyone but a major player with top ratings and I would NEVER buy permanent insurance from anyone but a mutual company.

 

[aufan]

James, term is basically term no matter what company you buy from. As long as the company has a strong rating, it is basically who has the best rates.

This is one of the major reasons I left a Fraternal organization (you can guess who that is) to become an independent agent. I was beggining to realize I was not offering my clients enough CHOICE. One of the reasons that fraternals have higher rates is they have a completely different structure than most insurance carriers. They pay refunds instead of dividends and provide fraternal benefits to their members.

I don't know that much about the structure of most mutual companies, but I can imagine they have similar internal expenses that keep their premiums higher than some of the other companies out their like AIG and Genworth.

I can tell you the fraternal that I was an agent for did not push the term products. They were heavy into the UL's when I was there.

 

[James]

James, term is basically term no matter what company you buy from. As long as the company has a strong rating, it is basically who has the best rates.

I strongly disagree as in not just disagreeing but strongly disagreeing, dang I like that!

The Conversion, a powerful tool for the Agent/Broker, can't sell W/L off the first swing, fine dump a ten year term and then convert. Doing what is right for the client is paramount, yet doing what is right is not a one sided issue. First you have too understand that once you decide to sell Life Insurance you're not dealing with a simple commodity but a dynamic product that can cover mulitple basis. And as far as the Agent or myself, in no way in hell am I going to spend much time peddling cheap term contracts, sure I'll sell it but I'm not going after it and spending my dollars to prospect only to end up satisfied with selling of cheap term policies.

So please get over yourselves, if selling term is what you want to do then find, you have fallen into a false reality. Brought on by todays institutions that frankly don't give a damn about you or your clients. The media and other professions is no more right about Life Insurance as they are about Health Coverage! BTID is nothing more then Government istitutions such as the NASD/SEC and the CFP Organization (and their feeble attempt to secure a SRO) has suggested and their blind followers will adhere to and of course go out and proclaim such nonsense on every mountain top they can find. What in the world to you think has happen in the last thirty years as Insurance Laws such as ERISA and other legislation that limits money inside a Insurance Contract is all about?

Plus add insult to injury now all companies are equal and I'm assuming we might as well count all contracts as being equal? Why even bother finding out what is in those contracts, I mean if they are all equal then why even bother reading contracts? As I stated many times, if as a sales person you can only deal with the lowest denominator such as price you should really think about switching the field you are in.

I strongly suggest selling value and usage, not price and product. The prospecting is about the same, seek out a natural market for what it is you wish to sell, and then sell it. If you decide to seek out those that would naturally buy Term then find. Yet though, just as a side thought why not prospect those that might find a need for W/L or good solid UL's? Or you can walk businesses, find one that needs a policy such as a Key Man and offer up a solid cheap term policy? I mean it makes sense, does it not?

 

[aufan]

So, I should only sell WL or Universal Life to be a "real insurance guy" ?

I find it quite odd that you would use such strong language to describe someone selling term as someone who "needs to get over themselves" and living in a "false reality"....what the ????...who crapped in your Wheaties this morning?

I have been captive selling only life and annuities. Hated it. Saw there were more competive products out there and became independent. Starting selling health insurance with the help of a friend and now sell life, annuities, DI and CI along with the health insurance. Love it.

Oh...and I do read contracts and I do sell WL and UL from time to time...but now I don't feel pressured to sell large WL or UL premiums to make a living.

 

[Crabcake Johnny]

Don't bash term too badly. I can sell life and have term for myself - 1 mill in coverage now and it's 30 year term good until I'm 68.

So what happens after I'm 68?

A: My house of paid for
B: My son's out of college
C: $1,000 a month in investments for 30 years at 8% interest is 1.5 million.

I think my wife will be just fine. I've actually been averaging, since I've been investing, over 10% but I'm just using 8% so you all won't get too riled up.

 

[aufan]

Thanks John....I was hoping you were paying attention.

 

[Crabcake Johnny]

I believe life insurance is there to protect a mortgage, kids while they're growing up and the spouse.

The mortgage eventually gets paid, the kids grow up and move out and you're supposed to have investments.

Now, if you don't have the discipline to invest than you need permanent life. If you do have the discipline to invest then permanent life is a bad purchase. I can destroy the returns of any permanent life policy and triple my DB with term.

Plus, what difference does it make to a family of 5 where the wife's at home, bills up the wazoo, and hubby doesn't make much? You can't properly insure him with permanent life and have him afford the premiums.

I'm all for the correct DB. What I've seen all too often is $50,000 or $100,000 UL policies and just the mortgage alone is $200,000. What good does that do?

I'd MUCH rather give someone a million in 30 year term then an incorrect DB for UL. Maybe the proper mix is some permanent with a term rider.

 

[NHB_MMA]

Now, if you don't have the discipline to invest than you need permanent life. If you do have the discipline to invest then permanent life is a bad purchase. I can destroy the returns of any permanent life policy and triple my DB with term.

It's a catch-22. If you don't have the discipline to invest, then you probably don't have the discipline for $200 per month for permanent life coverage.

I don't think having the discipline makes perm a bad purchase at all. There is nothing wrong with having a portion of your planning in a conservative, rock solid asset. Comparing your mutual funds to WL isn't a fair comparison because the risk is never compared. It's like if you have an F-150 and your F-150 has more horsepower and towing capacity than the Honda Civic. Great...but let's talk about fuel efficiency. Is it unreasonable to think a household might have a use for each vehicle?

You mentioned $1000 per month, which is incredible because most people would never have that discipline. I don't think it would be foolish at all for you to put $500 in a solid blue-chip fund, $250 in something more aggressive, and $250 in WL...if that makes sense to you. If you want to go more aggressive with the whole thing, hats off to you. You've got a head on your shoulders and you'll probably do okay. It's another way of thinking. Some people feel like a burger, while another person wants spaghetti. As I've said in the past, my only problem comes in when people here act like I'm scum because of my viewpoint. There's nothing wrong with my line of thinking either, if it makes sense to the client.

Of course, there are people that truly can't afford much of anything in the way of perm like a childhood friend I'm going to have a tough time getting anything together for. And then there are people, such as doctors, where it makes perfect sense to put a large amount of planning into perm insurance.

I'm all for the correct DB. What I've seen all too often is $50,000 or $100,000 UL policies and just the mortgage alone is $200,000. What good does that do?

I'd MUCH rather give someone a million in 30 year term then an incorrect DB for UL. Maybe the proper mix is some permanent with a term rider.

You're absolutely right. The death benefit is the most important thing to have right. I recommend some perm with a term rider as most people can't afford the entire thing in permanent coverage.