The Tragedy of Group Term
April 30th, 2019
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Categories: Life Insurance
Archive
Archive for April, 2019
Understanding the Flaws in a Premium Financing Policy
April 16th, 2019
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Convince a client without opening your mouth.
When I was a poor starving college kid, I sold my motorcycle to a guy for $300. Turns out the check bounced, so he had the motorcycle, and I had nothing. He wouldn’t give it back, so I went to small claims court. It may not seem worth it for the money, but 300 bucks was a lot to me back then, and I needed to eat.
At the courthouse, the judge looked to the other guy and asked his story. After hearing the guy’s side, the judge ruled in my favor. I never opened my mouth. You can imagine how ridiculous the situation was when I didn’t even have to present my side of the story.
I’ve written at length about how little the typical consumer understands about premium financing. A part of my job has been to vet deals and fix problems. But even I was surprised earlier today when I had a scheduled phone call with a client who retained me to review his deal.
The phone call consisted of the insured individual, the premium finance guys, myself and my associate. In a way, the client was the judge, and respectively, the agent and I were the defendant and plaintiff, though I didn’t mean for it to be adversarial. That being said, I didn’t think it was a good idea for the client to move forward based on what I understood as his goals relative to what I was seeing. All I proposed to do was to bring objective information to the table. For full post, click here…
Categories: Life Insurance
Premium Financing is Great… Except When It Isn’t
April 10th, 2019
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Digging into the numbers is exceedingly important.
More and more premium finance deals and proposals are making their way to my desk. Most have some common characteristics. First, they probably aren’t going to work, and second, consumers don’t understand them. When I say “don’t understand,” I don’t mean they simply don’t understand the details but that they have a misunderstanding of how the transactions will play out.
I’m a proponent of premium financing, when it’s done right and for the right reasons. Real-estate owners and developers have used OPM (other people’s money) very effectively because they’re often able to prove mathematically that the leverage makes sense. I’m doing the same thing when I don’t pay off my low interest home mortgage and keep my money in the market. However, when it comes to financing life insurance, I have an issue with much of what I see out there. First of all, I firmly believe that finance deals built around the arbitrage For full post, click here…
Categories: Life Insurance
OC Consulting Group – What’s it about?
