Guaranteed Issue/final Expense

[SportsNut]

Back 6 or 7-years ago, Forethought had a product called Maxima. It had immeadiete 30% coverage for everyone as soon as it was issued- no exceptions even if you were under hospice care. 70% at the 12th month.

My Forethought rep told us as long as were were putting at least 80% good business (stayed on the books over 24-months) to keep writing anyone that we could meet. Those were amazing times.

That product was on the market about 15-years before they changed it.

Like all things, no doubt this niche was exploited by some short-cut agents or agencies. Therefore it exists no more.

Cincinnati Life used to have a decent guar issue product as well. I forget the dynamics of it by percentage, but what I really liked about what this... As an agent you had a book of 10 policies. You simply wrote the app, tore it out along with the policy, and left the policy behind with the client. Not only guaranteed isssue, but INSTANT ISSUE as well. Sweet. The Rep with CLICo told me they had some adverse selection with the product, and therefore... bye, bye.

 

[CFP83]

20 in the whole year? I wouldn't even answer my phone when you called for support if i was your upline - no offense . . .

$3,000 AP per policy? The average FE policy in our group runs between $50 and $60 a month. Your estimate would be $250 a month - that's funny . . .

Tom

Because of my investment and insurane business as well as having access to over 1000 "ophan policyholders" my statutory company has given me to prospect I find a lot of 75 to 80 year olds with heavy loans on whole life policies that still have 10-15k of cash in them. Since the loans will eventually make the policy implode it would make sense to take the cash value...and since they haven't exceeded their cost basis, put it into a money market to supplement a 30-50k policy to use as FI. The only FI policies I've done are with Presidential and they were 4200 and 5100 per yr respectively...they key here is that is wasn't out of pocket money we used existing cash values in a policy that was doom to fail with a 81 & 83 yr old with major medical issues.

This is a unique situation and I understand the confusion. If these people had to pay out of pocket every month this would make sense at all....in this scenerio it's more of a transfer of dollars.

 

[Newby]

Because of my investment and insurane business as well as having access to over 1000 "ophan policyholders" my statutory company has given me to prospect I find a lot of 75 to 80 year olds with heavy loans on whole life policies that still have 10-15k of cash in them. Since the loans will eventually make the policy implode it would make sense to take the cash value...and since they haven't exceeded their cost basis, put it into a money market to supplement a 30-50k policy to use as FI. The only FI policies I've done are with Presidential and they were 4200 and 5100 per yr respectively...they key here is that is wasn't out of pocket money we used existing cash values in a policy that was doom to fail with a 81 & 83 yr old with major medical issues.

This is a unique situation and I understand the confusion. If these people had to pay out of pocket every month this would make sense at all....in this scenerio it's more of a transfer of dollars.

That math doesn't make sense to me. If they are paying $4,200 per year and only have $10,000 to start with, by the time they have full-coverage with Presidential (I assume it's 2-year graded) they will have run out of dollars to pay the premium.

The situation you are talking about is where they need to do a single-premium wealth transfer policy. But you can't turn $10,000 into $50,000 with it expecially at age 83.

 

[dgoldenz]

That math doesn't make sense to me. If they are paying $4,200 per year and only have $10,000 to start with, by the time they have full-coverage with Presidential (I assume it's 2-year graded) they will have run out of dollars to pay the premium.

The situation you are talking about is where they need to do a single-premium wealth transfer policy. But you can't turn $10,000 into $50,000 with it expecially at age 83.

x2.

 

[CFP83]

That math doesn't make sense to me. If they are paying $4,200 per year and only have $10,000 to start with, by the time they have full-coverage with Presidential (I assume it's 2-year graded) they will have run out of dollars to pay the premium.

The situation you are talking about is where they need to do a single-premium wealth transfer policy. But you can't turn $10,000 into $50,000 with it expecially at age 83.

Forgive me for not explaining throughly. In one of the example situations I gave, I had an 71 year old that had 10,800 of cash value and a net death benefit factoring in loans of 15,500 in her old whole life contract. She has a number of major health problems. We took the 14800 of cash value and put it in a high yield money market at American Funds with check writing priviliges. We then set up automatic contributions to the MM from her checking account monthly of what made sense for her situation (its always about suitability with me) which was $200 per month. Now the GI product I put in place was around 4200 per year with a 35,000 death benefit and remember she is putting into the MM at a rate of 2400 per year, So we're only have a burn rate on the MM of 1800 per year not factoring in the interest that the money is earning.

 

[NPCOACH]

Forgive me for not explaining throughly. In one of the example situations I gave, I had an 71 year old that had 10,800 of cash value and a net death benefit factoring in loans of 15,500 in her old whole life contract. She has a number of major health problems. We took the 14800 of cash value and put it in a high yield money market at American Funds with check writing priviliges. We then set up automatic contributions to the MM from her checking account monthly of what made sense for her situation (its always about suitability with me) which was $200 per month. Now the GI product I put in place was around 4200 per year with a 35,000 death benefit and remember she is putting into the MM at a rate of 2400 per year, So we're only have a burn rate on the MM of 1800 per year not factoring in the interest that the money is earning.

The math still seems fuzzy to me. Was her cash value 10,800 or 14,800? I am also not sure how prudent it is to take a 71 year old lady with a number of major health problems and put her in a new policy with a new incontestability period. What was the premium on the original policy? How much was the cash value increasing? If there was a loan on it, how much was the loan?

With 10,800 in cash, it would be gone in about 2.5 years at 4200 per year. Besides what is a high yield money market in today's world - 1.5%?

On the service, based on the limited info provided, it doesn't sound like it makes too much sense to me. I would tread very lightly before telling a 71 year old lady with a number of major health problems to cancel a life insurance policy. Why not just buy a smaller additional policy or borrow from the first to fund the second without canceling it?

You might consider putting some money in one of those high yield mm accounts to fund some e & o insurance .

 

[arnguy]

Tom, what's with the yellow type in your posts? They are almost impossible to read!

 

[gzpxyj]

The math still seems fuzzy to me. Was her cash value 10,800 or 14,800? I am also not sure how prudent it is to take a 71 year old lady with a number of major health problems and put her in a new policy with a new incontestability period. What was the premium on the original policy? How much was the cash value increasing? If there was a loan on it, how much was the loan?

With 10,800 in cash, it would be gone in about 2.5 years at 4200 per year. Besides what is a high yield money market in today's world - 1.5%?

On the service, based on the limited info provided, it doesn't sound like it makes too much sense to me. I would tread very lightly before telling a 71 year old lady with a number of major health problems to cancel a life insurance policy. Why not just buy a smaller additional policy or borrow from the first to fund the second without canceling it?

You might consider putting some money in one of those high yield mm accounts to fund some e & o insurance .

Good point!

 

[Newby]

Who has a guaranteed issue policy with $35,000 face?

 

[Todd King]

Who has a guaranteed issue policy with $35,000 face?

How about a graded policy up to 50K? I know where you can get one.