- 8,707
I just bumped up my life coverage last year and trust me, she now has the nicest husband in the word.
You just made it more enticing to bump you and get a new younger model.
Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
I just bumped up my life coverage last year and trust me, she now has the nicest husband in the word.
Markingriffin said:I talk with homeoffice people all the time that keep up with that type of stuff. I read boring things on cso2001 reports and all kinds of boring stuff. I've read in several different places that the insurance company will never have to pay death claims on more than 2% on avg on term policies.
We could talk about what % will keep the policy the entire time and many other reasons why it is so low.
Most companies will not sell you a term plan, if they believe there is a chance you will die.
The % was talk a lot about back when we talked about r.o.p. and also back in the days of buy term and invest the difference.
This is something that companies really dont want to talk about. We could talk about lots of different kinds of insurance this way. Lots of people will never get in a carwreck, but they still need to buy car insurance and the ones that do, are glad they have it.
I do study death claims , because as an IMO, we have to keep up with that type of things. Some companies will even fire you if you start having death claims on term polices.
I have always tried to convince people not to rely on their group term. I would guess that less than 2% of it is in force when needed. Seems the person has always just quit, retired, become disabled, changed jobs, etc. at the time death occurs.
That is why group term is so dirt cheap. Short of dying on the job, there is almost no chance it will pay.
Life insurance is pretty straight forward. At its heart, the more it costs the more likely it is to pay a claim. Longer terms cost more than shorter terms, and permanent costs more than term.
Umm, 100% of term policies written that are not lapsed, replaced, canceled, converted pay a claim, there would be no other option.
Term policies can just simply expire. A 10 year term policy 10 years and 1 month later... I think this was part of the question, how many make it through the term period vs how many pay a death claim, ignoring the other possible outcomes.
I can't see a life company publishing that number. It's probably low enough that it would scare off people from buying a life policy, since the very reason they buy it for seems to not exist in a few short years.
But, if you want to do the math, figure how many policies (annual premium) does it takes to pay a $1M death claim and at least triple that number. You might be close to how many term policies written does it take to pay one death claim. I'm guessing, but I can't see it working any other way.
Who cares if 2% of term policies pay. As long as consumers have coverage during the critical years they need it, then it served it's purpose. That's why consumers buy term insurance.
If we sell a term life insurance policy, it's our job as agents to be there if and when the need becomes permanent and look at conversions or other alternatives.
I care. I like to know what I'm selling and why. I know you know life insurance, at least term inside and out from what I have heard. There are certain things I like to know for myself. I came here looking for an answer. The answer you gave is an obvious one if I had asked the question "why do people buy term" then I would have hoped to see your stated response. That however was not the question I asked. Sometimes while guys like you are busy selling or whatever else yo like to do or don't do, guys like me are running numbers nobody really cares about or even thought about. It happens even if I don't want it to. With me it happens with things besides insurance as well. I'm a very analytical person. Can't help it, that's just the way I'm wired.
NOW moving forward.........Mark said that 1/2 or about 1/2 or near 1/2 however you want to figure it DIE due to an accident. With that said, how many here who sell term, offer accident riders or accidental death as part of the package or as a side?
The last term policy I sold, the guy asked me if it covered him if he died in an accident. I said it covers you no matter how you die. If you would like accidental death protection, we can add that on or obtain it separately. I told him for now though, let's hold off on that (mainly because I'm not that familiar with ADD, especially adding it on that particular term policy).
My thoughts are, if you have term life insurance and the average odds taking into consideration all age groups and those in poor health, that you have close to a 50% chance of dying from an accident, then why not have ADD coverage being it is so inexpensive?
Some ADD policies even have ROP so not are they only cheap, you get all your money back.
THOUGHTS?
Some time back I saw a LIMRA study that showed about 95% of death claims are paid from permanent policies.