Why Term over Final Expense?

[jdeasy]

I believe there is a gigantic market, currently almost totally ignored, for selling 20 year term to 60-year-olds (for example) to mitigate the loss of Social Security income if one spouse dies early in retirement.

Obviously it has to be explained properly and accurately, but that is a potential multi-billion-dollar market that is going begging at present, as far as I can tell.

How's that working out for you in tapping that gigantic market?

 

[steve heller]

How's that working out for you in tapping that gigantic market?

I'll report back as soon as I have some data on that.

So far I've been developing my tools to illustrate for it.

 

[BeeSelective]

Hope the term doesn't expire before they do.

 

[steve heller]

Hope the term doesn't expire before they do.

If the term expires before they do, then they have received both Social Security payments for the entirety of the term.

So they are in better financial condition than if they hadn't had the insurance and one of them had died during the term.

That's what term insurance is for, after all.

 

[WinoBlues]

Would you be interested in looking at my book and software? VolAgent suggested that you might be a good source for feedback on its viability, how it could be improved, and so on.

I will scan it if you like. However, The next two weeks I have a Son getting Married and Deploying in addition to a brother moving and a couple projects at an Organization I volunteer at.
Also have to go kill it in the FE, er....... SIWL market. OK, maybe not kill it, maybe just bruise it a little.

So I can not promise anything soon. There are a couple other guys here I think are better Planners than I am. Maybe they will reach out to you and offer a critique. I am not a great salesman. I am more of the " Here is what I recommend and here are the options, What do you want?" Guy.

On your software - There is or was a guy named Howard Wight that had some one-page illustrations that showed two or three side by side plans.

 

[steve heller]

I will scan it if you like. However, The next two weeks I have a Son getting Married and Deploying in addition to a brother moving and a couple projects at an Organization I volunteer at.
Also have to go kill it in the FE, er....... SIWL market. OK, maybe not kill it, maybe just bruise it a little.

So I can not promise anything soon. There are a couple other guys here I think are better Planners than I am. Maybe they will reach out to you and offer a critique. I am not a great salesman. I am more of the " Here is what I recommend and here are the options, What do you want?" Guy.

On your software - There is or was a guy named Howard Wight that had some one-page illustrations that showed two or three side by side plans.

Sure, of course I understand that you have other priorities. I'll PM you with the information and you can look at it when you get a chance.

Thanks!

 

[walthamny]

I am never a big fan of selling 20 year term to a 60 year old because I have met sufficient number of clients who came to me at age 81 saying that they bought the wrong policy 20 years ago, they thought they would have cash value by now, they can't believe the insurance company raised the price by %$#& at age 81, they thought it would go up by 3%, they are upset the insurance company took their money and now they have less money for their grandchildren college fund etc.

I got no problem with documenting at age 60, but if I were a lawyer and the client died 20 year plus one day, I would recommend suing the life agent for selling the wrong product. It is easier to defend yourself if you sell term and permanent combination.

 

[steve heller]

I am never a big fan of selling 20 year term to a 60 year old because I have met sufficient number of clients who came to me at age 81 saying that they bought the wrong policy 20 years ago, they thought they would have cash value by now, they can't believe the insurance company raised the price by %$#& at age 81, they thought it would go up by 3%, they are upset the insurance company took their money and now they have less money for their grandchildren college fund etc.

I got no problem with documenting at age 60, but if I were a lawyer and the client died 20 year plus one day, I would recommend suing the life agent for selling the wrong product. It is easier to defend yourself if you sell term and permanent combination.

I find it hard to believe that anyone could ever win such a lawsuit, assuming that the agent told the client the truth about the insurance that he was selling.

And my illustration software clearly shows when the insurance expires. If the agent doesn't explain it properly and get the client to agree that is what he wants, that's on the agent.

BTW, I bought 20 year term 3 years ago at age 64. Should my widow sue the insurance agent who sold it to us if I die right after it expires? If so, I'll have to let her know about that option.

 

[Newby]

The life expectancy of a 60 year old that is healthy enough to be approved for an underwritten term policy is definitely above age 80. Wouldn't it make more sense to do this with UL and at least illustrate it to an older age? Seems like you are just setting yourself up to have a lot of really pissed off people who's insurance ends right when they are getting closer to needing it. And your need for the insurance didn't change.

 

[steve heller]

The life expectancy of a 60 year old that is healthy enough to be approved for an underwritten term policy is definitely above age 80. Wouldn't it make more sense to do this with UL and at least illustrate it to an older age? Seems like you are just setting yourself up to have a lot of really pissed off people who's insurance ends right when they are getting closer to needing it. And your need for the insurance didn't change.

Apparently this is even more counter-intuitive than I had previously recognized.

Term effectively converts the second social security payment from an annuity on one life only, with no refund or period certain, into an annuity with a period certain or partial refund.

This guarantee of a minimum amount of income over the period of the term allows the couple to spend down their assets faster than would otherwise be safe, thus allowing a higher spending level even after paying the term premiums.

UL is too expensive to make this work.