newbyagent
Expert
- 37
Very, very new independent multi line agent here so I apologize for the ignorant question. I've just inherited a client with a 200k UL policy. The policy is 20 years old. The policy owner is currently paying aprox. $12k per year for the policy. The carrier provided an in force illustration showing the policy changing in year 21, to a Plan B w/increasing face and premiums are illustrated at about a level $20k per year.
The insured got a notice from the carrier recently saying that the cost of insurance will be about $13k next year, about 13.5K the following year, etc.. A gradual increase in COI each year.
However, in the guaranteed column of the illustration that (shows plan B) year 22 and on lists a premium of $20k and 2 asterisks. The asterisks denote "The payments shown are not sufficient to keep the policy in force under these assumptions".
So my question is this; How can the carrier say the COI is so low, but the illustration show a much higher premium that are "not sufficient to keep the policy in force"?
When I asked the carrier rep if the COI amount would be enough for the policy to stay in force, he said "yes, but the policy is going to run into some premium guideline violations". He also said that the policy could not illustrated with a level premium, it had to be shown with the option B.....
Can someone please help me make sense on what is going on with this policy? It seems like I have conflicting information.
1) What is the policy owner going to have to pay?
2) What is a "premium guideline violation"?
3) Why would the illustrated option b premium "not be sufficient to keep the policy in force when it is well above the carrier's reported COI"?
Any help you can offer would be a life saver. Thanks!
The insured got a notice from the carrier recently saying that the cost of insurance will be about $13k next year, about 13.5K the following year, etc.. A gradual increase in COI each year.
However, in the guaranteed column of the illustration that (shows plan B) year 22 and on lists a premium of $20k and 2 asterisks. The asterisks denote "The payments shown are not sufficient to keep the policy in force under these assumptions".
So my question is this; How can the carrier say the COI is so low, but the illustration show a much higher premium that are "not sufficient to keep the policy in force"?
When I asked the carrier rep if the COI amount would be enough for the policy to stay in force, he said "yes, but the policy is going to run into some premium guideline violations". He also said that the policy could not illustrated with a level premium, it had to be shown with the option B.....
Can someone please help me make sense on what is going on with this policy? It seems like I have conflicting information.
1) What is the policy owner going to have to pay?
2) What is a "premium guideline violation"?
3) Why would the illustrated option b premium "not be sufficient to keep the policy in force when it is well above the carrier's reported COI"?
Any help you can offer would be a life saver. Thanks!