I have tried to reach out to all of my clients that have been consumed by Protective Life over the years. Empire General, West Coast Life, Federal Kemper, Zurich Kemper, Chase and on and on to let them know that when Protective Life got all of those term life insurance policies in one place they made a change and it wasn’t in your favor.
It’s one of those gifts that just keeps on giving. People who bought 10 year term life insurance policies are just coming to grips with the fact that the only conversion option that Protective offers is a universal life policy (almost sounds like it should last forever) that is priced like a policy that is guaranteed to last forever (actually a little higher) but is only guaranteed to last 10 years at that premium.
So for all of you have 20 and 30 year term policies with the companies above, now Protective Life, any plans you had to convert all or part of your policy have now been shot in the rear by the small thinkers in charge at Protective. They knew when they did it that it stunk. At that time West Coast and Protective were (this is my take), so ashamed of the change they made that they, to this day have never told policy owners and didn’t even let agents know it was coming so we could warn clients. The first I heard about the change was when a client of mine who had 14 years left on her 20 year term that was costing $800 a year, was getting ready to retire and wanted to convert the policy to a permanent policy, as in goes on forever. I asked the home office to run a conversion illustration for me and when I received it I called and told them they must have made some kind of mistake. The conversion policy only had a 10 year guarantee and was going to cost $2600 a year.
They said that was now the only product that they offered for conversion. I asked if it could be over funded, say $3000 or $4000 a year and make it go on a lot longer and they said that it couldn’t. No matter what you put into the policy it was designed to have a 10 year guarantee. I just got a call from a customer that bought a 20 year Empire General term 9 years ago. He was approved at a standard rate back then and hoped to convert a portion of his policy to something permanent. You know, when it’s a giant company like Protective it’s really hard to explain to people how the company could make this kind of a change and not let them know. If it was Swamp Gas Life of Vermont or something it might make sense because they were small, but Protective, along with all the companies it gobbled up, is monstrous and people are faithfully still pouring massive money into the company every year paying for their term policies. Protective has yet to so much as drop a note in the mail to their devoted customers to let them know they were screwed out of one of the most important features in their policy.
Fortunately the guy today hasn’t had any health changes and we can get him a real life time guaranteed deal through another company at this point. I know I’ve been beating this to death for 3 years now and it’s not because Protective doesn’t allow me to sell their products anymore. It’s because so many of their customers will never know they’ve been screwed until it’s too late if someone doesn’t keep putting it out there. It sure won’t come from Protective. Most conversions occur when life insurance owners are over age 50, when they finally know what their permanent needs are. Protective term insurance used to be a planning tool and now it’s a dead end.
Bottom line. Protective isn’t the only company that has made similar changes, but they were the first and they were the only one who did it without telling anyone, clients or agents. If you have questions or currently have a West Coast Life or Protective term policy and want to know more about the bad news, call or email me directly. My name is Ed Hinerman. Let’s talk.