64 Yr Old Simplified Issue

I woud say you took the bait there CFP, hook line and sinker... about the clients fish tale.


lol :laugh: Perhaps your right there Sport.

I also appreciate your feedback and thoughts.

A final note, the client has a very nice seven figure investment portfolio with me....but it wasn't because "he invested the difference", it was because he invested every single penny he could afford to throughout his lifetime. He hasn't done bad for a humble old Ohio farmer.

As for the NYL participating whole life policy the agent recommend he get rid of, it was 350k at the time and would have grown to around 600k by now and would continue to grow until his death. The policy would also have been paying for itself (using the dividends) sometime ago. My thoughts are and always will be that anyone who replaces a quality product like this with term policy doesn't have the clients best interest in mind or simply is uneducated and doing what he/she has been trained. The client made the ultimate decision to pull the trigger, but don't most people generally tend to take their professionals advice too? Their doctors, attorney, accountants ect?
 
I agree with your assessment of the replacement.

Once he is 2-years past his heart attack, I would use Assurant/American Memorial. They give prefered rates to these cases and maintenance medicines don't count as treatment.

Their rates are higher than other FE companies BUT they give preferred rates to cases where other companies only offer graded or declines SO on some of these cases they end up being the cheapest and the best coverage.

Commission is 115% and 8% renewal for life.
 
A final note, the client has a very nice seven figure investment portfolio with me....but it wasn't because "he invested the difference", it was because he invested every single penny he could afford to throughout his lifetime. He hasn't done bad for a humble old Ohio farmer.

The client made the ultimate decision to pull the trigger, but don't most people generally tend to take their professionals advice too? Their doctors, attorney, accountants ect?

If the client has a 7 figure inv portfolio, where is the need to purchase life ins at this point; (especially considering the cost of FE products). Well I can understand the need, if he could buy ins at reasonable rates, but since he has assets, FE isn't necessarily the answer (for him). Client would be much better off repositioning some liquid assets, like 25K into a SPWL that will grow in surrender value as well as death benefit, at a reasonable int rate. Underwriting is fairly easy on these products as they have a thin amount of insurance above the deposit. 25K may get him a 35K DB... and in 10 yrs it may be 50K or more... and if he isn't paying prems of 3 or 4K on a FE product, his picture will be drastically improved over any other course of action, IMO.

Actually, most ppl don't take advice all that well. Most, like your client, want to play Monday morning QB and revise the story a bit, to justify why they did or didn't do this or that... and then of course, blame the advisor for things that they did do. Sound familiar...?
 
If the client has a 7 figure inv portfolio, where is the need to purchase life ins at this point; (especially considering the cost of FE products). Well I can understand the need, if he could buy ins at reasonable rates, but since he has assets, FE isn't necessarily the answer (for him).

Good question Sportsnut

I really enjoy getting into advanced planning cases where I'm teaching clients or prospects about concepts that they may have not considered before.....examples would be Non Qualified Deffered Comp, SERP plans, Pension Maximazation, 412(i), Bussiness succession/continuation planning, ILIT's, and Estate planning strategies. This is how I distinguish myself and my practice in the minds of other professionals such as CPA's, attorneys, and bankers who I have referral relationships with.

This particular client came to me via his attorney several years back. The client, as I mentioned is a farmer and has done well for himself. He has 5 children, 4 boys and 1 daughter. The four boys are active with the farm helping him run things but the daughter is not part of the operation. The concern that he explained was that he wanted to make things "fair and equal" for the daughter upon his death. The boys understandably did not want a sibling involved who doesn't have day-to-day involvement in the business. In most cases I would look at a second to die policy here which would give the daughter her inheritance upon the second death, mostly all of these policies will let you have one of the two insureds uninsurable. This way the four boys get the farm and the daughter gets the life insurance (all children obviously would split the investment assets). Unfortunately in this case, his wife passed several years ago.

So as I mentioned before in previous posts, my focus up to this point in my young career had been working exclusively with medically underwritten insurers. Now that my eyes have been opened to simplify issue, I'm looking at how this new-found knowledge can help me further help my clients.

So back to the original question, what would some of your suggestions be? Ideally I need 250k to make things perfectly equal as the farm is appraised at 1.25 mil. Anyone recommend a good single premium life insurer who does simplified issue up to 250k?
 
Even simplified issue does some underwriting. Let us know if you get this person coverage. I would be surprised.
 
If the farm is valued at $1.25 mil now, what will it be valued at upon his death? $1.5 mil? $2 mil? If that's the case, he needs an even larger policy than $250k if he wants to make things as even as possible. Simplified issue will probably still ask about heart conditions - I'm not an expert in the SI-area, so I don't know if they only have one rate for non-smokers and one for smokers, but it's possible they could assign him an additional premium on top of their "standard" rates also? I would shop this case with 8-12 major life carriers to get an idea if the guy stands any chance of coverage or not. You may be surprised at what you find - then again, it may be what you expect. You'll never know until you do it.
 
The client, as I mentioned is a farmer and has done well for himself. He has 5 children, 4 boys and 1 daughter. The four boys are active with the farm helping him run things but the daughter is not part of the operation. The concern that he explained was that he wanted to make things "fair and equal" for the daughter upon his death. The boys understandably did not want a sibling involved who doesn't have day-to-day involvement in the business.

Ideally I need 250k to make things perfectly equal as the farm is appraised at 1.25 mil. Anyone recommend a good single premium life insurer who does simplified issue up to 250k?

What are the other assets...? If he has invested well, then there are other assets besides the farm business and property..? Maybe the daughter gets the liquid assets and the sons get the earning assets, aka farm business and property. Yes, insurance would be an easier solution but it is not the only solution to these problems, and the amount of ins that he really needs isn't going to be available due to his health issues.

The solution could be a series of Notes between the receipients of the farm property and business, (The boyz) and the non-receipient (the daughter); aka a structured buyout. Or a comm'l mtg from a Farmers Hm Admin to create liquidity needed. Advanced planning of such things can go a long way to preserve any relationship between siblings, so that they don't have to sort this can of worms out on their own, when the time comes.

The 250K that you need isn't going to be a simplified issue product. A SPWL product would require at least 200K in premium, if the farmer has that liquid... and again, if he does, maybe he doesn't need the ins at all, or maybe he does. If not, and based on his health problems, ins still isn't likely going to be the answer here. Just the realities of the situation.

What is the income of the farm... and what other assets does he have, both liquid and invested, with and w/o the farm property and assets? You are asking for suggestions here without providing all the details.

SN; CFP, class of 89'
 
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