Primerica Term Conversion?

[Norwayguy]

Actually Prime offers ARTie at some really big rates for conversion. I had a couple where he had too high a PSA score and was a decline and she was healthy. Healthy absolutely no contest, primeamerica falls waaaay down the list of companies. But for the husband he has no choice at this point and pays about 4 times the market for their coverage. So you can continue with Prime, but can you afford it?

No I understand this...I was responding to the post above mine a diehard Primerica agent....I guess I don't understand how a Primerica Agent can with a straight face talk about doing right by people by offering a term policy that is renewable but not convertable and is on average more costly then a similar policy from a carrier with the same or better ratings that is also renewable but as well as convertable its not like in this example the conversion option is costing the client anything or that he has to use it...its there in case something goes wrong with the buy term invest the difference plan and as insurance agents isn't that what we are doing providing protection from the unexpected?

 

[Guest]

You're missing the point HealthGuy. Primerica is the ultimate BTITD company, any permanent insurance is like the anti-Christ to them. Kind of like someone from Amway buying a Proctor & Gamble product.

So, wouldn't having a conversion option to permanent insurance be the exact opposite of everything they stand for?

Hey, I got two MLMs in one post LOL
- - - - - - - - - - - - - - - - - -
Hey, it's a new paradox!

The old paradox:

"If 7-11s are open 24 hours a day, 7 days a week 365 days a year, why do they have locks on the doors?"

New paradox"

"If BTITD is the best strategy, and the invested "difference" will make up for any future insurance need, why does your policy have a conversion provision?"

PRIMERICA does not have conversion provision.
Show me a whole life policy that can provide the same coverage as a term policy at the same cost.
Usually it cost about twice as much to buy a whole life policy.
Does your family have whole life?
Sorry folks I would rather have a pile of money than have a pile of life policys when I retire.

 

[Norwayguy]

PRIMERICA does not have conversion provision.
Show me a whole life policy that can provide the same coverage as a term policy at the same cost.
Usually it cost about twice as much to buy a whole life policy.
Does your family have whole life?
Sorry folks I would rather have a pile of money than have a pile of life policys when I retire.

Racjac,

actaully I would say a whole life policy with the same death benefit level will probably cost a lot more than twice the cost...but what we have been talking about is a lack of a conversion option in your policies....So let say you sell a 20 or 30 year term policy to a 30 year old person and now he is approaching 60 his health has declined and he may not be able to purchase a new term policy. The Theory of decreasing responsibility didn't work for this client because he recently got divorced and most of his assets went to the wife and he had to pay out a ton for his childrens college expenses and now He just bought a new house so he once again has a 30 year obligation with his new wife plus all those loans he took out to help his children with there education...Now with your term policy he can renew his policy and the rates keep going up and like any term policy there is a point where he will no longer be able to pay those premiums...But if he has a term policy from most of the carriers you talk down about he has the same ability to renew the policy but he normally also has the right to convert it into a permanent policy without having to be underwritten again and yes the policy might be more today at 60 then your renewal rate but in a couple years it will feel like a bargain as the renewal premium on the term goes into the stratosphere and he does not need to convert the entire policy he has options...and these options come from fine companies with similiar financial ratings or better then Primerica has and in a lot of cases his term policy from these other companies that offers this additional protection costs him less then the primerica term policy. I know I will probably never convince you but let me ask you this.

If Buy Term and Invest the Difference is good and we want to do right by the client why would you not want to offer the client A policy that offers every feature yours does as well as a conversion option and may cost less meaning they can invest even more or get more face value?

 

[Guest]

Doesn't that concern you if your clients health changes and 15-20 years down the road he still needs coverage and his assets are not enough to cover his obligations. Don't you think it would be great if he could convert from his term product to a Permanent policy ie UL or WL at that point?

I know I'm going to regret bringing this up because nothing I or anyone else says will make you change your mind about Primerica.

If that should happen Primerica can put that person in another policy no questions asked. You see Primerica guarantees insurability up to age 95 if that person already has our policy.
My God I hope the client would not need it.
Most of our policys are 30 year term anyway.
A person could accumulate a lot of money in that time frame.

 

[Dave020]

PRIMERICA does not have conversion provision.

So, no ability to take reduced paid-up coverage for things like final expense. I guess they have to buy a separate policy from another agent for that. How do you factor that cost in?

Show me a whole life policy that can provide the same coverage as a term policy at the same cost.

Ok.

ACL contract with NML low mix $10,000 base WL / $490,000 complife initial term segment (self-converting using dividends and additions). Could also use EOL or VCL product.

• Term 20-year annual premium $800 (with you guys, $1000)
• ACL annual Premium $1500

After 20 years:

Your Term = $0 value or converts to more expensive ART
Cost= $20,000 with you guys, $16,000 with WCL or better priced carrier.
Cost to client = -$20,000

ACL (@20 years with paid up additions) = $150,000 reduced paid up insurance (no more premiums due with paid up additions).
Cost = $30,000
CSV ACL contract = $50,000
Cost to client = +20,000

With the ACL, now client is up $20,000 and has a paid up for life policy which will not only be there for life, but will continue to grow without any premium payments as the annual dividend buys more paid up additions. Kind of cool how that works, huh?

Now, he could invest the $10,000 he saved by buying the term product and would likely have at a conservative rate maybe $40,000 (rule of 7) so his net would be:

+$40,000 investment portfolio gains
-$20,000 cost of your term
+$20,000 net gain over the 20 years

Basically the same gain as with the ACL contract, EXCEPT with the ACL contract he has a paid up for life policy with no more premiums due (even at the guaranteed rate) which will continue to increase in size and CSV if he wants to ever cash out.

With the term scenario he broke even, so he did not lose either way. EXCEPT, now he is 20 years older and may or may not be able to buy insurance to replace what he just lost, or he may get rated into the tables. And you'd have to factor his new premium into the overall since he has to buy a new policy. The ACL is paid-up, so that is a free keeper.

BTW, I used NML in this example because they have great policy mix products that are self-converting AND have never failed to pay a dividend on their whole life since 1867. Also, I do not work for them nor with them.

Usually it cost about twice as much to buy a whole life policy.

For same DB 100% whole life, a lot more than twice depending on how the policy is structured. Blended product, depends on the mix.

Does your family have whole life?

Yes, and term also. What's your point?

Sorry folks I would rather have a pile of money than have a pile of life policys when I retire.

Dow went from 14000 down to now 8500. Homes in CA are short-selling at 30% of the current mortgage on foreclosure. Where is that pile of money going to come from. The BTITD idea can work if 2 things happen: 1) the market goes up 2)they actually invest the difference and in something that increases in value.

 

[briko3]

What happens when they buy the policy and don't invest the difference?

 

[Dave020]

What happens when they buy the policy and don't invest the difference?

In my example above, you'd be down $20,000 in the hole with no insurance.

 

[SalemInsuranceGuy]

If that should happen Primerica can put that person in another policy no questions asked. You see Primerica guarantees insurability up to age 95 if that person already has our policy.

So let's say the client is 30 and buys a 30 year Primerica Term and somewhere along the line he gets lung cancer. You're telling me Primerica will give him "another policy" with no questions asked? Or will they continue to renew his "current policy" until age 95 at a higher and higher ART rate each year? I find this hard to believe that they would switch you to another policy.

My God I hope the client would not need it.

Most of our policys are 30 year term anyway.
A person could accumulate a lot of money in that time frame.

Yes, we all know 100% of Primerica clients are financially independent at the end of 30 years aren't they?

You were just given an excellent example of why their buy term and invest the difference plan didn't work. But you choose to bury your head in the sand and ignor facts.
The facts are 95% of the people are either dead or dead broke. Only 5% are financially indpendent. However, that still doesn't negate the need for life insurance. What about for estate planning purposes to pay the tax? A family may have accumulated millions in assets but they're not liquid and the government wants the tax money in 9 months. So the heirs don't have the money and the IRS sells off the property at reduced prices to cover taxes and the heirs are left with nothing.

Stop drinking the kool-aid for a minute and stop comparing your term to whole life. Compare your term to term. You've been given sites to do the comparison to your product head to head against other term companies.

Go tell your upline you found a Travelors whole life policy and you want to replace it and see what they say. You may be shocked to learn that Travelors evil whole life is protected and somehow right for the client while other companies evil whole life are not protected and wrong for the client.

So yes, while I agree if a client needs 500k of term life coverage and some agent sells them 100k of whole life that is wrong. You always sell the need as if they were going to die tomorrow. Many of us on this forum don't even sell whole life or cash value life or if we do it's in rare circumstances based on doing the right thing for the client. Many of us sell just term 99% of the time. So pull your head out of wherever it's stuck up and get a clue that most life insurance agents sell primarily term.

Or let's talk about one of your uninsurable prospects that has terminal cancer. They don't have 30 years do they? They may only have 6 months to 6 years or so. You just turn them away and say oh so sorry. Where normal agents can offer a graded death benefit policy. Yes it's an expensive whole life, but you know what, it pays off. I had one on my mom for over $300 a month for $50,000 of coverage. She had cancer and couldn't get any other insurance. I paid the premiums. When she died it paid off. I've worked at companies before like Western Southern and I delivered a lot of death checks from the old client base. Guess what most of the death checks were cash value life. I only delivered a few term death benefits. The reason is term is designed to expire or become unaffordable a few years before a person normally dies of natural causes.

So all types of life insurance have their place. Term and cash value life is good depending on the circumstances and needs of the client and their budget.

 

[LGilmore]

"I was responding to the post above mine a diehard Primerica agent"

You know there's an old saying around Missouri about having an arguement with an ***. "You should never argue with a jackass. It just makes you look foolish and annoys the jackass."

I don't waste time with any Primera "agent". It's like talkng to a eight year old with ADHD.

Prime is an average company with an average product. It is easily beaten by dozens, if not a hundred other insurance companies using their "own" concepts. Just replace the business with a better priced policy and let the client decide later what options to use. That way you lowered their costs and increased their options.

 

[Guest]

Actually Prime offers ARTie at some really big rates for conversion. I had a couple where he had too high a PSA score and was a decline and she was healthy. Healthy absolutely no contest, primeamerica falls waaaay down the list of companies. But for the husband he has no choice at this point and pays about 4 times the market for their coverage. So you can continue with Prime, but can you afford it?

I am surprised he was even covered at all with high PSA score.