Permanant insurance questions

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Oct 10, 2009 9:57 pm

I'm looking for a permanant insurance product that offers cash value you can illustrate with confidence. Maybe they just offer 3 percent, but it's guaranteed.
Also, are there some kinds of permanant insurance that build more cash value? If you have a client that is interested in this,what is a good way to go?
Or what about permanant insurance that doesn't really build cash value but has a no-surrender feature?
Do you find that clients who want permanant insurance are more interested in the cash value or the permanancy?


Oct 10, 2009 11:24 pm

buyandhold,

 
You need to be introduced to the insurance industry's rule of 1 to 100:  In one year, 100% of your illustrations will be wrong.
 
But, if you're insisting on this, I would only count on the GUARANTEED side of your illustrations.  Don't even show the non-guaranteed as those numbers are based on a dividend scale that may or may not happen in the future.
 
Whole life, Universal Life, Adjustable Life, Variable Universal Life, Variable Whole Life... there are many kinds of insurance contracts that can build cash value.
 
What's a good way to go?  That's YOUR job.  I'm partial to whole life, and may recommend other kinds of insurance based on the objectives and purpose of the funds.
 
No surrender feature?  How about Guaranteed Universal Life.  That's basically "Term to 100".
 
Clients who want INSURANCE want INSURANCE.  The PERMANENCY of the insurance is paramount.  Cash values are a nice extra feature.
Oct 11, 2009 12:12 am

Thanks.
I prefer Whole Life, too, and want to get as much permanant coverage DB for as little premium possible, never mind the cash value. Apprreciate hearing the cash value is just an add-on.



Oct 11, 2009 5:35 pm

Clients aren't interested in permanent insurance.  They are interested in doing things such as having as great of an income as possible in retirement and leaving money behind at death.  If permanent life insurance helps a client do this, they'll buy it.

 
Buyandhold, there is one thing that may really help you in terms of your conceptual understanding of live insurance.  Keep in mind that it does not have a cash value.  Instead, it has a cash SURRENDER value.  The real value of these policies is a death benefit that doesn't go away.
 
 
Gordon Ramsey, I like your insurance posts.  One thing that I would suggest is to not sell GUL as term to age 100.  Structure it so that it is lifetime term.  Otherwise, you will have a client who may live past 100, and lose their insurance.  (I assume that you actually do make sure that your GUL policies are structured to be lifetime term.)
Oct 11, 2009 11:49 pm

Anonymous,

 
Thank you and you're right.  I structure my permanent policies to last as long as they do.
 
Sometimes a "mental picture" on the prospects terms is much easier than changing the way they think about certain insurance products.
Oct 13, 2009 12:52 pm

That's a really good post, maximizing your retirement, retire with dignity and freedom, etc.

 
How do you respond when prospects say, "i'll leave the house to my wife and she can sell it when I die to have income for the rest of her life"
Oct 13, 2009 3:05 pm
ChrisVarick:

That's a really good post, maximizing your retirement, retire with dignity and freedom, etc.

 
How do you respond when prospects say, "i'll leave the house to my wife and she can sell it when I die to have income for the rest of her life"
 
"What if she has to sell it in this kind of market?  Won't she have to do with less if there is a fire-sale?"
 
"If she sells the house, where will she live?  How does she feel about selling the house you both have so many memories about?"
 
"OK, so let's say she sells the house so she can provide for herself.  What is going to be her strategy to give herself an income she can't outlive while passing along a legacy to your kids/grandkids/charities, etc?"

 
"You are a short-sighted gasbag who has nothing to do but argue with a sound financial strategy because you're afraid of letting your hard-earned dollars go.  Here's a clue:  The only people in this world who make money passing are quarterbacks.  And I don't see any numbers on your shirt.  So, take this pen in your hand and sign on the line.  Press hard.  Now, do the same thing on your next check in your checkbook.  Well done."
 
OK, so I may not say the last one, but the others will work. 
Oct 13, 2009 5:51 pm
ChrisVarick:

That's a really good post, maximizing your retirement, retire with dignity and freedom, etc.

 
How do you respond when prospects say, "i'll leave the house to my wife and she can sell it when I die to have income for the rest of her life"


 
If someone says that they most likely aren't a life insurance prospect because they don't care about what happens when they die or they aren't taking you seriously. 
 
If someone is taking you seriously and does care about what happens when they die, you won't get that objection.  If you do get that objection, it should be easy to overcome.
 
"Yes, you can certainly leave the house to your wife.  Let's take a look to see if that will allow her to live the way that you and she would like her to be able to live along with seeing if that is the best way to accomplish that goal."
 
Oct 21, 2009 10:37 am

John Hanc*** has a good whole life pretty good cash value thats guaranteed, They also have a  15 yr. policy which is guaranteed to be paid up in15 yr.s

Oct 25, 2009 1:46 pm

Hanc*** has a pretty competitive UL product. Never go with a stock company in terms of a whole life product because you can't share in the dividends. Plenty of other carriers also have "15 pay" permanent policies.



 
For UL policies, take a look at MetLife's, Hanc***'s and Nationwide's.
 
For participating whole life policies, take a look at Mass Mutual's (or whatever your BD lets you sell)
Oct 27, 2009 3:31 pm

I have ran comparisons of VUL and par WL and WL always seems to come out ahead...ALso, there are products that build cash value faster, like HECV (High Early Cash Value) WL.

Oct 27, 2009 7:58 pm

stalbott, comparing illustrations is a suckers game.  Run an illustration with a VUL getting the highest that you can illustrate and then WL with a lower dividend scale.  The VUL will be much better.  What does this tell you?  Nothing.