Q: What Do Agents Say to Consumers?

  • The agent, as a result of not understanding the illustration, may misrepresent the product to the consumer.

--  Judy Faucett

1992 - SOA - Life Insurance Sales Illustrations, Society of Actuaries - 16p

  • Sales Process
  • Walker v LSW - Video - Levine - heard exactly how these were being sold.

Some of the comments that we have heard from regulators about the illustration situation suggest feelings of, if not outright despair, growing frustration.

  • A couple of them spoke sadly of the futility of regulating an illustration when the real issues involve the agent or the company.
  • Larry Gorski of the Illinois department mentioned that in states that do not regulate advertising or promotional materials, misleading statements can be rampant in those materials even if the illustrations are made pure.

 --  Benjamin J. Bock - Transamerica Occidental

1992 - SOA - Life Insurance Sales Illustrations, Society of Actuaries - 16p

  • The agent said that Universal Life policy premiums would stay the same, but I came to realize that this is not true of our policies.
  • ...what bothers me is that I am afraid that this same misleading information may be the basis of my children's and grandchildren's ... planning...

--  Statement of Gloria Darleen Newberry

1993 0525 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance? - [PDF-354p-GooglePlay, No Video]->Not on govinfo.gov 

19. When I recommend Paragon or Provider <IUL>, I inform my clients...

  • I tell clients that the cash value is guaranteed not to go down when the market goes down because the cash value has a 0% annual floor.

--  Declaration of Sean L. Covi - (Agent), 10.09198-JVS(RNBx)

Joyce Walker et al v. LIfe Insurance Company of the Southwest

Q: Could you describe for the jury what you were trying to convey when you drew this drawing, Exhibit 774, on the back of her illustration.

A: Jeffrey Stemler - (Agent): This is -- when we are sitting down talking about insurance, we try to explain to the prospects exactly how the insurance works.

  • So this is part of our talk that we give to explain how it works.
  • So this would be a build slide.
  • This didn't just start there.
  • I drew a line on the bottom and I said:
    • When you buy insurance, there is a minimum amount that you must pay for insurance to pay for the costs and put the policy in force.
  • And I drew the line and I wrote minimum, and I would ask who do you think sets that price.
  • Some people will say: I don't know.
    • Others: Well, the insurance company.
    • I go, yes, you're correct.
  • And I said: They have actuaries, and the actuaries, their job is to figure out how much they need to collect for any given amount based on the age of the person so that they can cover the risk and also still make a profit.
  • I said: But there's another line that we need to be concerned about, and then I draw the line up on top and I put the max there.
    • And I say this is the maximum you can pay for a contract.
    • I said: Do you know who sets that limit?
      • People will often say: Well, the insurance company; right?
      • And I say: No. It's actually the government.
  • In the example we'll often say: Well, let's just assume that this is $500,000 that we are dealing with here and the minimum premium is a thousand dollars and the maximum premium is $5,000.
    • Why would anyone put $5,000 into a contract if you could buy the same amount of coverage for only 1,000?  (p40-41)

2015 - Walker vs Life Insurance Company of the Southwest - TRIAL DAY 11 - Case 2:10-cv-09198-JVS-JDE Document 820 Filed 12/01/15 - Page 40 of 279 Page ID # 33532