With that title someone might think we’re about to say something good about Protective Life, or is it Dai-Ichi Life? Anyway, we really sort of thought that when Protective sold themselves to the Japanese insurance giant Dai-Ichi, there might be some let up in their never ending appetite for screwing clients. I was surprised yesterday when a client called and mentioned that they had received a quote from Selectquote for a Protective policy that for the price of a 30 year term was guaranteed to stay in force until age 121. The quote was on a 27 year old meaning that Protective’s 30 year term had a guarantee for 94 years.
Well, call us cautious when it comes to Protective so the person sent us their illustration and sure enough it was a guaranteed level premium for a very long time, terminally offset by a death benefit that drops like a rock after the 30 year period. You’ve followed us occasionally ranting about AARP and their hideous chain of life insurance products that can end up at age 100 with a person having paid more than twice the death benefit in premiums. It just doesn’t seem right on all sorts of levels that a life insurance company should be able to keep on charging when the death benefit is paid for. In reviewing Dai-Ichi’s new life insurance product we found that through a combination of long term commitment to a product whose death benefit keeps dropping until it finally levels out at $10,000 (started at $250,000), the Protective-Ichi Custom Choice UL can set you up to pay 3 times the death benefit at age 100. And we thought no one could out suck AARP. Boy were we wrong. This person was kind enough to share their Selectquote produced life illustration for this wonder product.
We’ve never been accused of being big fans of Selectquote but actually pushing this product is kind of an all time low in the discernment department for them. As you can see in0 the illustration by age 81, about the time the average person might be getting close to needing the life insurance, the death benefit is down to $10,000 and the insured has paid in nearly $11,000. Age 81 also happens to be the point at which the premium starts going up. Seriously! You’ve paid for the death benefit and if you want to keep it in force you now have to pay annually increasing premiums. Other milestones for this policy are at age 102 when you have paid $30,341 for your $10,000 policy. And remember, there’s no cash value so if you quit paying those premiums you don’t even have the $10,000 death benefit. You’ve paid 3 times the life insurance benefit over 70 some years and if you quit they cancel the policy. How about age 112 when you paid in six times the death benefit and finally, your prize for living to 121…..you will have paid in $108,000 for your $10,000 policy.
Why would anyone sell a product like that? It’s called COMPENSATION!!! We’ve talked about the kind of compensation contracts large mega agencies like Selectquote can work out. Because of the volume they can create companies will pay huge bonuses often creating first year commission well over 100% of the first year premium. In the case of this pathetic little UL that Protective is pushing, well, I can’t say for sure but I’m kind of wondering about the UL renewal commission. I have gone over and over this Protective life insurance abomination of a product, and any agent or agency that cares about their customers wouldn’t be selling it. It has shown its’ ugly head for what it is, one more way for Protective to keep people from having the amount of insurance they want when they need it. They killed conversion from term and now they want to make it up to the world by selling easily the worst conceived life insurance product in history.
Bottom line. Protective is ugly America at its’ worst but now at least they can blame it on their new Japanese owners. If you have any questions or are considering doing business of any kind with Protective, call or email us directly, we can help.
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