Steve’s special guest is Lee Mowry, Forethought Insurance Company. Lee’s been in the insurance business for 42 years and worked in the final expense market for 25 of those years. He’s researched and evaluated over 50 final expense products during that period, helped design and implement final expense products for 5 insurance companies as well as build and manage final expense distribution for all of those companies. Steve and Lee address final expense insurance.
Aging Population: Why Final Expense becoming a bigger part of the equation
There are almost 40 million people age 65 and older in the US today (13% of population); 10,000 a day turn 65. Estimated that by 2030 (18 yrs) there will be 72 million age 65+ (19% of population)
Also estimated that approximately 65% of Senior Citizens have little or no final expense protection
Products are normally permanent insurance (whole life) with guaranteed death benefit, premiums that do not increase and cash values. Underwriting is very simplified with no medical exam and few health questions. Issue ages for final expense are normally higher than for other insurance; usually to age 80 or 85. Flexibility of final expense coverage is important as the benefits can be used for any type of final expense and not just funeral costs (i.e. medical bills, debts, legal fees, continuing income, etc.)
While there are probably 50 or more life companies in final expense, Forethought has been the leader in the sale of Pre-Need (Burial) insurance for over 25 years so the move to final expense insurance was a natural transition to them. Forethought is rated A- (Excellent) by AM Best , A- (Strong) by S&P and was listed in Wards Top 50 Performing Life and Health Companies in 2010 and 2011.
Forethought Freedom:First of all, the rates are very competitive; an absolute must in the final expense arena and is approved in 48 states and the District of Columbia (not in NY or WA). Freedom product includes 3 benefits; Level, Graded and Return of Premium, in most states, and all pay the same commission (there is no commission reduction on any benefit unlike most final expense company products). It includes Supplemental Benefits of Accidental Death and a unique Grandchild Rider both included in the base premium, at no extra cost.
Accidental Death Benefit Rider – In the event of a qualifying accidental death, Level & Graded benefit will pay twice the face amount (200%) and the Return of Premium (ROP) will pay the full face amount (100%) (included in the base premium)Grandchild Rider – Pays the lesser of $5,000 or the face amount of the policy in the event of death of the first eligible grandchild (included in the base premium)
Underwriting decision is made while the agent and applicant are on the phone (with Apptical representative), usually within 15 minutes. Accelerated Death Benefit Rider pays up to 97% of the face amount if the insured is diagnosed as terminally ill (6months or less to live). At death of the insured, beneficiaries receive the full policy amount due within 48 hours (subject to contestable period)
Policyholders have access to Forethought’s Funeral Planning Network of over 5,000 funeral professionals nationwide.
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