Author Topic: New trend - Instant approval life insurance  (Read 8344 times)

Online ExGingi

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Re: New trend - Instant approval life insurance
« Reply #80 on: July 24, 2017, 01:24:48 PM »
Nearly every term policy has a continuation period to age 95 or later (as ART), including the one from Haven. It's expensive - they charge the maximum allowed by law - but it's an option.
They actually seem to have a current charge that is lower than maximum charge, but that too doesn't make any sense.



vs A UL Policy at age 74



I've been waiting over 5 years with bated breath for someone to say that!
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Offline skyguy918

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Re: New trend - Instant approval life insurance
« Reply #81 on: July 24, 2017, 01:26:02 PM »
...while inferring that algorithm based underwriting is simplified cannot be further from the truth (especially since those program do require traditional exams on a case by case or randomly selected basis).
The word simplified literally does not show up in the text of the article. The only instance on the page is within the graphic on the chart. Nowhere do they imply what you're saying. The point of referencing that LIMRA study is to show that there's a major appetite for reducing friction in the sale/underwriting process. The fact that the end result is actually fully underwritten is, if anything, the cherry on top.

Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #82 on: July 24, 2017, 01:28:21 PM »
One thing I can assure you, that $7 more is commensurate with the additional risk and value to both sides. It's not a 'deal'.

You're not wrong but I think most people would be willing to shell out an additional $7 per year for the extra feature, just because it's an insignificant premium. I'd feel good advising someone to do so. Especially since it might enable the person to sell the policy to a life settlement company once they don't need it themselves anymore.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline skyguy918

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Re: New trend - Instant approval life insurance
« Reply #83 on: July 24, 2017, 01:30:30 PM »
You're not wrong but I think most people would be willing to shell out an additional $7 per year for the extra feature, just because it's an insignificant premium. I'd feel good advising someone to do so. Especially since it might enable the person to sell the policy to a life settlement company once they don't need it themselves anymore.
If that's part of the sales model, I'm glad I'm not in that line of work.

Online ExGingi

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Re: New trend - Instant approval life insurance
« Reply #84 on: July 24, 2017, 01:31:34 PM »
That makes absolutely no sense. If you bought it for income replacement, and you already covered your income years, you're gonna be upset that you didn't gamble on your health going bad?
Based on that logic, one should buy decreasing term, or should reduce the face amount every year (or every 5 years) commensurate with remaining earning capacity.


One thing I can assure you, that $7 more is commensurate with the additional risk and value to both sides. It's not a 'deal'. Therefore, you have to ask whether that coverage is needed or even wanted. If you can truly convince the client that their coverage needs extend past age 65, it's straight up negligence to push the convertible 15 year instead of a 20 or even 30 year term.
You might have a crystal ball, or better yet be a נביא. I do not have one, and am definitely no נביא! I don't know what will happen to me in 15 years, let alone someone else. Why don't you survey some 59 year olds, and see how many of them that are positive they only want (I'm not even going to use the term need) the coverage for the next 15 years, would be willing to pay another $7 a year (that's less than 2 cents a day) for the remote chance that there might be a reason for them to want it beyond 15 years.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline skyguy918

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Re: New trend - Instant approval life insurance
« Reply #85 on: July 24, 2017, 01:34:40 PM »
Based on that logic, one should buy decreasing term, or should reduce the face amount every year (or every 5 years) commensurate with remaining earning capacity.
Absolutely. If it can be done economically and efficiently (it can't in the current insurance market).

Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #86 on: July 24, 2017, 01:38:20 PM »
If that's part of the sales model, I'm glad I'm not in that line of work.

That's a cheap shot. We're not talking about ROP Term here, where you pay double the premium (or more) to get a payoff at the end. I was simply saying that for an incremental cost of <1% of the premium, you tack on a "trade-in" value for the policy. If you can explain to me why thath's objectionable, I promise I will never do it (easy for me to keep that promise, because I'm not in that line of work either).
I'm an optimist; but only because life isn't going to give me any other good choices.

Online ExGingi

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Re: New trend - Instant approval life insurance
« Reply #87 on: July 24, 2017, 02:00:16 PM »
I was simply saying that for an incremental cost of <1% of the premium, you tack on a "trade-in" value for the policy. If you can explain to me why thath's objectionable, I promise I will never do it.
I second that call.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline gozalim

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Re: New trend - Instant approval life insurance
« Reply #88 on: July 24, 2017, 03:50:51 PM »
can you explain the trade in value of the convertible?

Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #89 on: July 24, 2017, 05:14:44 PM »
can you explain the trade in value of the convertible?

If you have a permanent policy, there is a secondary market you can sell it to. After that, they will pay your premiums and call once in a while to ask you nicely to please die as soon as possible. I don't think there is a market for term policies even if there is an ART extension
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline gozalim

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Re: New trend - Instant approval life insurance
« Reply #90 on: July 24, 2017, 05:20:03 PM »
If you have a permanent policy, there is a secondary market you can sell it to. After that, they will pay your premiums and call once in a while to ask you nicely to please die as soon as possible. I don't think there is a market for term policies even if there is an ART extension
Correction: So you're arguing that a term customer should buywho has the convertible rider, can then before expiration, convert policy to a small WL policy and sell it?
« Last Edit: July 24, 2017, 05:30:58 PM by gozalim »

Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #91 on: July 24, 2017, 05:28:55 PM »
So you're arguing that a term customer should buy the convertible rider, then before expiration, convert policy to a small WL policy and sell it?

I'm definitely not arguing for that. But if the price difference is $7 per year for conversion rights up to age 74 then it seems worthwhile to purchase that option. Who knows- you might want to convert and keep it
I'm an optimist; but only because life isn't going to give me any other good choices.

Online ExGingi

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Re: New trend - Instant approval life insurance
« Reply #92 on: July 24, 2017, 06:27:46 PM »
If you have a permanent policy, there is a secondary market you can sell it to. After that, they will pay your premiums and call once in a while to ask you nicely to please die as soon as possible. I don't think there is a market for term policies even if there is an ART extension
A convertible term policy (where there's underwriting arbitrage) should have value in the secondary market. One doesn't need to convert prior to settlement.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan