Subject: Re: Re: Re: Re: Re: Re: Deceptive Practices?

Comments:
: : "Whole life and other permanent products do not subsidize term plans. And if the term insurance is convertible, it raises the cost of the term insurance. and it is still cheaper." : : - That is because if you compare the two policies you will discover several differences. I KNOW, because I PERSONALLY have inspected "cheaper" term policies. First of all, with Primerica, the cost of the policy is FIXED for up to 30 years, and WILL NOT go up, nor will the coverage go down. With other "cheaper" policies, you may have a level 30 year term, but only the death benefit is level, the premiums go up yearly. Why don't you do me a favor and not talk garbage about something unless YOU HAVE PERSONAL KNOWLEDGE about the policies in question. This above scenario has been the case on almost EVERY individual (not group) policy that is "cheaper" than Primerica. : ****I read your posting in amazement. I have never read such garbage in my life. First of all, it is my understanding that Primerica sells a 30 year term but the rate is not guaranteed for the full 30 years. I understand the policy is what we call a 30/10 which means that it is a 30 year term but the rate is only guaranteed for 10 years. Companies offer this type of policy because the reserve requirements are lower and it allows them to sell it at a lower premium. The problem is that there are plenty of companies that sell a 30 year term where the rate is guaranteed for the full 30 years. : ****Now let's discuss your statement about the policies you have examined. First of all, you called the policy you examined a level 30 year term and then state that the premium increased each year. The policy you are describing is called ART (annual renewable term). There is no such thing as a 30 year term policy where the price increases each year. By using the word level you are indicating that the premium and coverage are level for the length of the term, that is the definition of "level" term. Annual renewable term doesn't have any term period associated with it and there are also very few companies that sell that product anymore. It is not profitable because people do not keep that type of policy very long and the companies had to raise the rates in order to recover the costs of placing the policy in a short period of time before the person dropped the policy. : ****You then go on to state that just about all the policies that have a lower price than Primerica's are of this type. Man, you have got to get your head out of the sand. I am an independent agent and about 95% of my sales are term insurance. Every policy I sell has a premium and death benefit that is guaranteed for the full term. I have no problem beating your rates. If you ever feel like you want to start comparing rates just let me know. : : "Smith Barney fund sold through Primerica give the same performance as the same funds sold through an independent broker." : : - Ok, but too bad the only places you can buy Smith Barney investments is through either Primerica or Smith Barney directly, and I am pretty sure that going to a Smith Barney broker with $25/month with no lump-sum investment will get you no-where. With Primerica, you can start investing for as little as $25/month. Thanks anyways though. : : " As far as other insurers ripping people off, do yourself a favor. Get a subscription to A.M. Best, and take a look at the amount of claims paid out by Primerica relative to its total premium income, and its total commission expenses. Now go look at Prudential, or AIG, or any other insurer you don't care for and look at the same numbers. Do you notice anything interesting? What do you notice about the numbers?" : : - If you want to talk about commissions, then why is it with the typical whole live "Cash Value" policy no cash value typically accumulates for the first 2-5 years? Because of the INSANE commissions that are paid. Not to mention that the cost of the policy is already outrageous. Next, they usually "guarantee" a return of around 6% (again, not always this exact number, but in the same general area). This 6% is before the fees and commissions that are paid to the agent (yes, that's right, commissions are paid more than once, where they are only paid once wit a term policy), so the NET return on your money is actually closer to 2.5-3%. Not bad considering inflation has averaged about 4.90% the past 30 years. Oh, they also tell you that it's a great deal, because you get tax benefits and you can cancel your policy to get the money, or "borrow" against it. Let me ask a question....does anyone know when they'll die, so they can cancel the policy for the cash value before hand? NO! And guess what, once they die they LOSE the cash value. What a great deal, huh? But let's say for arguments sake they did know that and cancelled for the cash value. Well, any income they earned on that cash value is now taxable (since it is tax deferred, not tax free such as a Roth IRA), and we've already seen how small a return they were actually getting, so now the cash value is almost non-existent. Where, they could have instead bought a cheaper term policy, invested the difference to fairly easily earn a 10% return (after fees it may be 8-9%), and have this money grow TAX FREE because they paid the tax on the upfront. Which would you rather pay tax on, $100 or the $100,000 that it grew to? Also, if they die, they get both their policy and their investment instead of just the policy and not the cash value. Which option do you think is better, and which type of company blows more money? I'll let you figure that one out on your own. Oh, and by the way, we do get higher commissions than a typical insurance company, but they have something called advertising and salary, where we have none. So, our costs are MUCH lower, which is why if you look at the details of policies and compare two near identical policies, we are typically cheaper (most of the time except for group or internet companies). Once again, thanks for playing. Better luck next time though :) : ****The only thing that I want to correct you on is the concept that you think cash value policies pay insane commissions. First of all, I only make 70%-85% commission on UL policies and I make 100% on term and the company I work with allows me to eventually make 110%, (I have to be promoted to higher commission levels). I agree that you can do better with your money in a Roth IRA and that is if the agent selling the UL is trying to sell it as a savings plan. I disagree with that. The people I sell UL to buy it because they want to have life insurance for the rest of their life and they want to lock-in a lower premium now instead of having to pay a higher premium when they get older and may not be able to afford the cost of term 20 or 30 years from now. The key to selling permanent insurance is complete disclosure. My clients know that there is a chance that they will have to increase their premium if the cash value does not perform as illustrated. I let them know that we will need to periodically do in-force illustrations to see how the policy is performing. I tell them if the policy is not performing as orginally illustrated that we will need to bump up the premium to bring the policy back on track. My clients buy these plans fully knowing what they are getting and they know that it is life insurance and NOT a savings plan. : ****You guys also do not get higher commissions than independent agents. That may be true of other captive agents like you guys are. I make a higher level of commission than an RVP and I also can recruit other agents if I want. I have about 20 agents under me right now in 10 different states.

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