2 Have Life Insurers gone too far? “Falling Prices, Falling Sales”Best’s Review - November 01, by David F. WoodsAs prices have fallen…sales, not demand, have fallenAnnual policy sales have declined eight straight yearsPeople who plan to buy out number 3:1 actual sales21% of people earning more than $75K say they need more life insurance54% of people between $35K & $75K need more life insurance31 million people say they plan to buy in next 12 months
3 Have Life Insurers gone too far? “Falling Prices, Falling Sales”Best’s Review - November 01, by David F. Woods11 million policies were sold vs. identified 31 million who want to buyConclusion:In the life insurance industry where prices are falling, demand exceeds sales and supply is unlimited, the failure has to be in distribution.Why?
4 Have Life Insurers gone too far? “Falling Prices, Falling Sales”Best’s Review - November 01, by David F. WoodsFACTORS:Tremendous reduction in premium rates combined with fewer policies sold. Agent is making 50%of what they made 10 years ago for the same case.40% of agent’s income is from insurance sales compared with 60% 10 years ago.Agents steering away from more difficult life insurance sale with such a financial disincentive.
5 Have Life Insurers gone too far? “Falling Prices, Falling Sales”Best’s Review - November 01, by David F. WoodsRESULT:We have 60 million who say they need more life insurance -31 million who want to buy within next 12 months - will life insurance agents be willing to fulfill this economic demand if carriers continue to decrease rates and commissions?
6 Have Life Insurers gone too far? The answer is:SAVER’S SELECT TERM&RETURN OF PREMIUM
7 “At last - a term life insurance product worth selling ” Saver’s Select Product Positioning“At last - a term life insurance product worth selling ”AgentsSaver’s Select allows the agent to earn better than average income with the addition of unique customer focused rider benefits.Saver’s Select liberal preferred underwriting allows the agent to place more cases without the need to resell the policy on delivery.ConsumersSaver’s Select term provides easy to obtain coverage with unique benefits for families and small business owners.Saver’s Select term provides benefits when your client needs them and return of premium if they don’t.
8 Saver’s Select Term Competitive rates Return of Premium and Disability Income RidersHigh 1st year commissionsRenewal commissions- up to 10 yearsShort form applicationAge last birthdayLiberal preferred underwritingExcellent smoker ratesNo blood through $500k Age 40 and $250k age 50Commissionable policy fee
9 Saver’s Select Policy Design 15, 20, or 30-year term$150,000 minimum face amountRates guaranteed for 10 years or full term period by use of RiderLiberal preferred underwriting allows for more cases to placed as submittedConvertible on or before tenth policy anniversary to ULIssue ages (age last birthday)10 year term periodguarantee guarantee15-year plan20-year plan30-year plan
10 Saver’s Select Policy Design cont. $60 policy fee, fully commissionable, no additional policy fee for up to three insuredsFive Premium Bands$150,000 - $249,999$250,000 - $499,999$500,000 - $999,999$1,000,000 - $2,999,999$3,000,000 and upTremendous selection of ridersMoney back return of premium riderOther insured rider (up to 3 per policy with only one policy fee)Disability protection riderWaiver of PremiumAccelerated Death Benefit
11 Saver’s Select Simple Underwriting Short simple application for quicker turnaround timeNo Blood through age 40 & 500K, age 50 & 250KEasier for your clientTwo underwriting bands -- Preferred and Standard allow agent to sell rate with confidenceNo need to resell case at delivery with higher rateYour Client: Male 45, 6’0 248, BP 150/90 Cholesterol 260, HDL 7.0 , one parent die before age 60 due to heart or cancer…gets our best rate!
12 Saver’s Select Liberal Preferred Underwriting Liberal Height & WeightLiberal blood pressure readings150/90 age 50 and younger160/95 ages (blood pressure treatment allowed if controlled over last 2 years)Cholesterol260 age 50 and younger280 ages 51 to 65300 over age 65, Cholesterol/HDL ratio cannot exceed 7.0 (Cholesterol treatment allowed if controlled over last 2 years)
13 Saver’s Select - Get Paid Faster Less than 30 days turnaround on fully underwritten applicationsEasy to manage pending reports - SalesLinkWeekly EFT availableAnd Let’s talk commissions…High First Year RateCommissionable policy feeANDRenewals up to 10 Years
14 Saver’s Select Riders Disability Protection Rider Maximum monthly benefit is the lesser of:$3,000 monthly or66 2/3% of monthly payTotal disability is defined as inability to substantially perform in the usual and customary way the essential duties of “any occupation” for which the insured may qualify by reason of education, training or experienceMust be added at issue only90 day wait 2 year benefit
15 Other Insured RiderUsing this rider - up to 4 people can be insured under the same policy.Ideal for business - allows policyowner to add or drop insureds as needed.The death of one insured does not affect coverage for the others.Face amounts may vary by individual.Available for all term periods.
16 Children’s Level Term Life Rider One premium is charged for all covered childrenIssue ages: 15 days through 18 years of age; age last birthdayMinimum/ maximum: $5,000/ $10,000; available in increments of $1,000If primary insured dies while this rider is in effect; each child will receive a paid- up term life policy to age 25.Convertible to age 25.
17 Accelerated Benefit Rider If client is diagnosed with a terminal illness, they can receive up to 50% of the policy death benefit, up to a maximum of $250,000Must be elected at policy issue.No Premium charge.One time administrative fee of $350 at time of claim.
18 Ultimate Income Endorsement Ideal for Income Replacement SalesEasier to understand for ClientSelling Income - Not Face AmountFlexibility in Death Benefit PaymentUsually results in sizable discount over traditional capital approach to needs determinationConsider the following example...
19 Ultimate Income Endorsement 40 year old Male Preferred NTWants death for immediate cash needsAlso needs $3,000 per month income replacement for 25 years until age 65Wants to help supplement spouses retirement with additional $100,000 paid at the end of 25 years.With a traditional capital needs approach the cost would be $1,156Utilizing the Ultimate Income Rider the client can receive the payment exactly as they want - GUARANTEED. For a premium of $877 which represents a savings of 24%.
20 Ultimate Income Endorsement The Ultimate Income Rider allows the policyholder to designate how the benefit will be paid with any or all of the following options:An initial lump sum payable at death to take care of immediate cash needs.A choice of 5 to 25 years of dependable guaranteed monthly income.A final lump sum to be used when the income stream is completed.This benefit calculation is software supported.
21 Ultimate Income Endorsement Other BenefitsCan be changed at any time by OwnerGuarantees Income at a time it is needed mostAllows the spouse to “control” proceeds from the graveEasier to sell actual income instead of large face amountsFlexibility in death benefit design can reduce premiums in competitive situations.Eliminates concern for investment expertise.
22 Saver’s Select RidersMoney Back RiderConcept:Coverage for your client if they need it…return of premium if they don’t!Available at issue onlyTypically increases the premium by 30% on the 30- year term, by 90% on the 20-year term, and by 144% in the 15- year termIS IT A GOOD DEAL FOR YOUR CLIENT?
23 Saver’s Select Riders Money Back Rider Let’s assume the following: Male / Age 45 / Pref. Non-tobacco / $500,000Saver’s Select Term $500,000 w/o Return of Premium =$Saver’s Select Term $500,000 w/ Return of Premium =$Increased cost to provide guaranteed Return of Premium =$340.00Additional $ generates a guaranteed refund ofpremium of $48,450 at the end of 30 years.The net result...
24 Net after-tax guaranteed equivalent over 30 years Saver’s Select RidersMoney Back Rider8.67%Net after-tax guaranteed equivalent over 30 years
25 Saver’s Select Riders Money Back Rider Full money back is paid if the policy is kept in force to the end of the term periodNo money back is paid for lapses in the first 5 policy yearsPartial money back is available for lapses after 5 policy years, in the following percentages of premiums paid:
26 SAVER’S SELECT TERM COMPARISON COMPULIFE TERM4SALE03/07/01Information is deemed reliable.Rates subject to changeby the minute.
33 Saver’s Select Benefits How good is age last birthday?
34 Saver’s Select Benefits Age Last Birthday 50% of the time you have a better rate than the competition-- just because of ageLess confusing to your clientsDifference in Rates for competitors:Male N/S 45 and 46 Pref. 30/10Federal Kemper: 9% increaseFirst Penn-Pacific: 12.5% increaseOld Line Life: 12.5% increase
36 Saver’s Select Benefits What is better than a fully guaranteed 30 year term life insurance product?
37 Saver’s Select Benefits A 30 year term life insurance product from F&G Life with a return of premium rider!
38 Saver’s Select Benefits Return of Premium Rider Compare 30 year term product with fully guaranteed rates versus 30 year term with 10 years guaranteed and the Return of Premium RiderMale 45 $500,000 non-smoker Preferred Class:F&G Life preferred with Return of Premium $1,615First Penn-Pacific Life GTO30 $2,125The Old Line Life $1,970North American $1,750Protective Life $1,615West Coast $1,745Coverage with more than canceled checksEnd of 30 year period ROP $48,450
39 A GREAT SALES OPPORTUNITY X,XXX,XXX term life insurance policies sold over last 5 years.7 out of 8 illustrated were issued other than best rateNo renewal commissionNo service feesMost without Disability Income riderMost without Return of Premium RiderIntroducing F&G Life’s….
40 Saver’ Select Term Exchange Program Full Commissions!Non-MedicalNo Medical ExaminationNo BloodNo HOSShort-Form ApplicationRenewals up to 10 years.Any fully-underwritten term issued in last 5 years**consult ineligible carrier list
41 Saver’s Select Term Exchange Program The Hottest Term Product in America is Sizzling!Term to Term exchangeUp through age 60Face amounts from $150,000 to $500,000Rider’s are transferred if available on Saver’s SelectUp to 3 additional insureds can be added to 1 policyCan add Return of Premium RiderInitial Premium Draft - NEWPreferred class available
42 Saver’ Select Term Exchange Program Simple ProcessComplete Short-form applicationAttached original policy and photocopy of app & medical examComplete transfer of ownership formComplete exchange transmittalInitial Premium Draft or PAC if requestedState replacement form if applicable
43 Saver’s Select Term Exchange Program Ineligible Carrier ListEmpire GeneralF&G Life (no internal exchanges allowed)Guaranteed TrustLincoln BenefitManhattan NationalThe MidlandMerit LifeState LifeUnited of OmahaU.S. Financial
45 Summary and Conclusions F&G Life has designed Saver’s Select to aggressively compete in the “neglected” brokerage term marketSaver’s Select exemplifies F&G Life’s commitment to niche market opportunitiesSaver’s Select delivers distinct benefits to your clientsAgents now have a product that they can afford to sell with less hassle for you & your customer
46 Saver’s Select…..Simply “Benefits for your clients if they need them…return of premium if they don’t”