Westland is here to help you protect your clients, their, families, their businesses and their portfolio.
Case 1 – NEGLECTED CLIENT – DEVASTATING
A Client couldn’t get hold of their Advisor (retired) and he called the carrier after receiving a potential lapse notice. The carrier referred the case to Westland.
This client was 83 years old and had been faithfully paying on his Universal Life policy for over 30 years. He had thought he was being responsible and if he just paid his premiums on time, his insurance would be there when he passed and he would leave a nice legacy for his spouse or family.
Unfortunately this was not the case. His advisor had not served him well and he ignored or didn’t understand the information presented to him on each annual statement received.
I confirmed with the carrier information about his policy. Yes, his premium would need to increase about 6 times to just keep the insurance in force for just another year and would have to increase about 15 times annually to keep it in force to age 100. Both options totally unaffordable and did not make sense. It seemed that he would easily live 10+ years and he would have to spend more than the death benefit over that time to keep his insurance. I could hear the devastation in his voice as he came to a realization that he was not going to be able to continue the life insurance and leave a nice nest egg for his family as planned.
I consoled him with the facts that his family has been protected for many years, should the worst have happened and that he should be thankful that he has been blessed with good health that will likely carry him well into his 90’s.
Take-a-ways: This situation was so avoidable if action was taken early in in the life of the policy. Don’t neglect your responsibility to provide continued service after the sale and make sure you have explained and presented what is being offered credibly so clients know what may happen in the future.
Perform routine policy reviews for products you sold and even for those products that your clients own that you did not sell. You will find many opportunities to assist and Westland will be happy to help you help your clients. Reach out to us anytime.
Case 2 – Policy Review Done Right
I received a copy of a client statement for a John Hancock Protection UL policy with a LTC Rider to review. This was sold 5 years ago with a $100,000 single pay deposit to a Female age 65 at Standard Health. The policy provided $224,146 in death benefit being 100% liquid for any potential LTC costs at $8,966 monthly available. Still a very viable solution for many clients today.
We assisted the Advisor with this review and recommendation.
5 years ago your original hypothetical illustration used during the application process reflected a 5.05% rate. At that time, John Hancock assumed they could maintain that rate to carry your policy to age 125. However, the renewal rate history reflected in your statement over the past 5 years shows that this rate has not been maintained by John Hancock. The current rate is at 4.55%.
As stated in your John Hancock correspondence, if you do nothing and the rate remains at 4.55% and they don’t change the cost of insurance, your policy will still carry to your age 100.
To provide a little more cushion, you could pay an additional $352 annually to carry your policy to age 105. Again, this is assuming today’s rate of 4.55% remains constant along with the current cost of insurance. Please note that if rates improve over time, your statement will reflect a higher age that your policy will carry to at current costs.
We are happy to provide other options for consideration and we can discuss these during our follow up call next week.
You should always review your annual policy statement and understand what it is telling you. You don’t want to get caught down the road and see that your policy may be in danger of lapsing without a high amount of additional premium.
Call for assistance with any LTC, Annuity, DI or Life case today.