Rapid Decision Term Products

[newmindfashion]

Would appreciate some feedback from the life ins. veterans in the community. Health insurance is my expertise so I would love to hear your thoughts on products such as Fidelity Life Association's Rapid decision (A minus from Best last I checked) term life.

Jefferson National offered something like this a year or two ago and then stopped. In short, as many of you probably know, these simplified issue products involve an application and an MIB check with no para-med or medical records needed. Jefferson National was B+ with Best and Fidelity is A-.

The rates are higher than competitive term rates but reasonable and its much simpler to get a policy issued. The face values only go up to 300K for younger applicants and 200K for over 50. My concern is regarding how safe these companies are. Any thoughts? Is this type if plan a bad risk? In the health insurance industry, agents are often comfortable with A- and even B+ ratings. It seems life agents tend to feel differently. All views appreciated on this since this is not my expertise...

 

[somarco]

Jeff National had a product, as did American Life of NY and Boston Mutual.

All gone.

Now Fidelity, GTL and probably a few others are offering similar products.

I have sold some of them in the past, mostly for folks who wanted coverage for a few months (for varying reasons) and needed immediate coverage. Never had one stay on the books longer than 3 months or so.

The only way I can see these products being sold effectively are for people in the mortgage life business. They can call people with new mortgages, take their application by phone, and have coverage issued the next day. A lot easier than some of the junk mortgage life agents go thru.

This seems to be a very limited market, mostly for folks looking for low face amounts and don't want a needle. Somewhere I recall reading about 40% or so of life applicants buy coverage that does not require a physical and do so to avoid the exam & stick.

I have never met anyone making a living selling quick issue term. Can't say I know anyone even making an extra $1000 a month.

Seems to me there are a lot of other things more profitable.

Perhaps if you can throw up a website & drive traffic to it for next to nothing, you might make a few coins off it. Otherwise, I would look for something else to keep you off the golf course.

 

[newmindfashion]

Good advice. My main concern is the financial security of these plans. I simply offer the instant issue plans to thse that don't want to go through the normal life underwriting process with a West Coast, Banner etc.

 

[somarco]

The carriers behind the products are sound. If the product is withdrawn from the market it has no effect on existing policyholders.

 

[newmindfashion]

Bob,
Good to hear. That's reassuring.

 

[insuremojo]

The only way I can see these products being sold effectively are for people in the mortgage life business. They can call people with new mortgages, take their application by phone, and have coverage issued the next day. A lot easier than some of the junk mortgage life agents go thru.

This seems to be a very limited market, mostly for folks looking for low face amounts and don't want a needle. Somewhere I recall reading about 40% or so of life applicants buy coverage that does not require a physical and do so to avoid the exam & stick.

I have never met anyone making a living selling quick issue term. Can't say I know anyone even making an extra $1000 a month.

Seems to me there are a lot of other things more profitable.

I know people who are doing just that (well, not personally). There's a Nationwide agent in California that sold 250 instant issue policies last year. Pretty good, average face amount at 25k with an average commish of $120 per app he's bringing in about $2500 extra a month just from those. He's writing these to cover the loans of cars! He must have a lot of healthy clients I guess .
Anyways, Nationwide has an instant issue term life insurance policy up to $99,999. Anything 100k and above requires underwriting. By the way, no instant issue if the client answers yes to any of the health questions, in case you were wondering. If used properly (in conjunction with an auto ins sale) it can bring in good extra income.

 

[James]

You also have Liberty Life, an RBC company offering up to $150 Rapid Term.
http://www.rbcinsurance.com/us/cid-62046.html#EXP

Now of course this comes with a premium. If you go thru normal channels a 100 grand for a 47 year old is around or less than $30, with the rapid decision you'll pay around $60 for the same person for a 20 year term.

 

[bluemarlin08]

Why would you take a policy like this unless you had something to hide in UW?
Those I have seen selling this type of product are the predators, no way jose!

 

[somarco]

I can't imagine why anyone who is healthy would buy (and keep) this kind of policy.

Several carriers have entered, and exited, the market.

Must be a reason.

This market lacks legs.

 

[James]

Now if you are a smoker with a family history of death from cancer under 60 years old of an immediate family member plus have a moving violation on your MVR and have high cholesterol level your premium is about the same as with the rapid term policy if you fill out the form as a non smoker with no history and rated as Preferred.