Policy Lapses- No More!

Remember what happened to Universal Life policies written in the 80’s and 90’s? Vanishing premiums that didn’t vanish?  Premium and cash value projections that couldn’t stand the test of time? How many angry phone calls did you receive from clients accusing you of selling a scam? LifeTrack with John Hancock’s Protection Universal Life (Current Assumption type UL) policy would have gone a long way to mitigate the problems, and perhaps would have prevented policy owners from getting that letter telling them their policy was going to lapse unless they paid a huge annual premium.

We all knew that the illustration projections were not guaranteed.  And, that decreases in interest crediting and increases in policy costs would affect the performance of the policy.  What most of us and our insurance company partners failed to do was monitor the policies on a regular basis to gauge whether the actual performance was still in line with the initial projections.  John Hancock has come up with a solution to that problem with LifeTrack Billing.  LifeTrack Billing is a policy management system that monitors how a policy is performing compared to the original projections.

Every year, prior to the policy anniversary, John Hancock will send the policy owner a statement that lets them know whether their policy is performing as intended.  If interest rates decreased or policy costs increased, they will be notified of the new premium that will be required to achieve the goals of the original illustration.  The beauty of this is that first, John Hancock is dealing directly with the policy owner.  The agent doesn’t need to monitor these policies on a yearly basis.  Second, if an increase in premium is necessary it would likely be a small incremental increase along the way as opposed to a devastating increase 20 years from now.  And, the client could evaluate the effects of paying an additional premium or not and decide it they want to make a change.

You might say, “Why don’t we just sell a Guaranteed UL instead of a Current Assumption UL?” We wouldn’t have to worry about premium increases in that case, and  GUL policies are a great answer to the non-guaranteed UL’s we sold previously.  However, they generally have little or no cash value cushion in case of missed payments or late payments. And, you may have noticed that most of the GUL products on the market are being re-priced (upward) to compensate for the long guarantees and low interest rates.  The John Hancock Protection UL is generally guaranteed for life expectancy, but projected to last forever.  The premiums are lower than the currently offered GUL products and with LifeTrack Billing the policies are monitored annually to make sure they will last.

LifeTrack is a tool for clients to make sure that when they need their policy the most, it is there for them as expected. LifeTrack prevents surprises 10, 15, 30 years down the line by keeping the client informed along the way.

Last week we wrote about John Hancock’s unique product feature, Vitality. Vitality is a proven wellness plan included in John Hancock’s products to help reduce clients’ premiums up to 10%! If you missed it, make sure you read about it here.

LifeTrack clients with Vitality will also receive a letter prior to the premium notice informing them on how many points are needed to earn a higher Vitality Status to lower their premiums.

Want to see LifeTrack in action? Contact us for an example.


Join the Discussion