Life Insurance

Utilizing ROP Term to pay off a mortgage early…

Presented by Jim Linn Most clients’ largest financial debit is their home and if something were to happen to them they want the mortgage paid off.  We have heard this countless times from clients. If you had the ability to show them a product, that not only covers the mortgage should they die prematurely, but if alive, also provides them a cash benefit to pay off the house early and save THOUSANDS, do you think they would be interested? Who wouldn’t be!  I am using a custom ROP Term rather than the traditional 20, 25 or 30 year plan.  Why?  First, it is different than what your competition shows them and second, you can customize the time frame based upon your individual clients’ mortgage lengths.  Option A:  Your Client: Male 35 PNT $250K 30 year Mortgage at 4% interest. Monthly Payment: $1200 (Principal and Interest)  Product: $250K 28 Year ROP Term Annual Premium: $787.50 28th Year ROP Amount: $22,050 (787.50 x 28 Years) 28th Year remaining loan balance:  $25,278  By applying the $22,050 to the existing loan balance that leaves a balance of $3,228.  The client could either pay it off entirely from savings, cash on hand, or simply make 3 more payments.  Your client just saved themselves $28,800 ($1200 x 24 payments) and covered their mortgage should they die prematurely.  Option B:  Male 35 PNT $250K 30 year Mortgage at 4% interest. Monthly Payment: $1200 (Principal and Interest)  Product: $250K 30 Year Term Annual Premium: $307 30 Years x $307= $9210    Your client can take the cheap option and hand over $9,210 at the end of 30 years or take the SMART option and save THOUSANDS of dollars and pay off their home early.  Which option do you think they will choose?  Call your Life Marketer at 800-397-9999 for details  P.S. – Don’t forget about coverage on the spouse as well.  This multiplies the benefits of Option A.
Life Insurance

What’s behind door number 3? A life insurance conversion…

Presented by Brian Leising   Are you unhappy with the conversion options available to your clients? Not able to sell term and permanent coverage to every client every time?  Here’s another option to consider: Return of Premium (ROP) term.  How can ROP help?  At the end of the term the client receives cash, walks away and that’s the end of it, right?  Most carriers offering ROP actually give the clients three options.  The obvious option is to take the cash and run.  The client could also apply the cash to convert to whatever permanent plan the carrier makes available at the time, thereby reducing the required premiums to maintain the same face amount.  What people tend to forget is the third option.  The client can choose to use the ROP funds to purchase a reduced paid-up policy.  The policy is paid-up…guaranteed. Here’s an example from one company using a preferred non-smoking male age 35 for $500,000: The annual premium is $110.  After 30 years the person could choose a $64,322 paid-up policy.  He could alternatively purchase a traditional term for $530/year and 30-pay a $64,322 no-lapse UL for only $544/year.  Two separate policies actually represent a savings of $26 in this scenario.  But is your client going to do that?  If they will, that’s great, you just used the ROP concept to sell a permanent plan in addition to the term you were going to sell anyway.  Your client is closer to having the proper coverage for their needs and you made more money.  Cha-ching!  But how many of your clients are actually going to do that?  They may not see the need for permanent coverage.  When money gets tight, which policy is going to go?  What if they miss a premium payment on the no-cash no-lapse guarantee UL?  There are potential leaks in the two-policy plan.  People don’t always do what’s best for them, but what is perceived to be easiest.  The ROP option gives the client only one policy to deal with and an absolute guarantee their permanent plan will indeed be permanent.  They know from day one how much permanent coverage they will have and what the premium will be – zero.  Show your clients what’s behind door #3.  You can’t lose.
Disability

ROP Rider for a Younger Client

Presented by Donna Ries Here’s an idea to consider for a younger client: Protecting an income should be a client’s top priority. One option that may be advantageous for a younger client is the return of premium rider on a disability insurance policy. For example, a 27 year old female administrative office worker making $30,000 that had a $1,000 benefit amount to age 67 with a 90 day elimination period would pay about $28 per month in premium. Of that premium, the return of premium rider would cost around $7 per month. If no claims were made, at age 67, a full return of premium would be received. That means over 40 years the client would have paid an extra $3,360 in premium to receive all premiums totaling over $13,000 back at age 67. That’s an attractive return to consider. Return of premium features vary by carrier. Contact your DI marketer for more information to customize your case.