So you want to know how to calculate Final Expense premiums correctly and quickly for your final expense clients. I am going to get into that right after this.
Final Expense Quoting Coach and Mentor
I am Matt McCray, agent and success coach here at FEXSuccess.com. I help agents in the final expense market sell more final expense insurance and be more successful by providing final expense sales tips and final expense training. My only goal is to make sure that you are meeting your goals. Now stay tuned to the end of this video and I am going to give a secret password that’s going to allow you to access our final expense quote engine online, on our website. So let’s get started on final expense quoting!
Calculating Final Expense Premiums 3 Ways to do it
There’s basically 3 ways to calculate a final expense premium when it comes to final expense. There’s the way you use a final expense rate table and you calculate the monthly premium or the annual premium or quarterly with a calculator basically, a pencil and calculator doing some math figures. The second way is to use a pre-done rate calculation sheet that already has the monthly calculations pretty done up for you by the final expense carrier. The third option and the easiest option is to plug your numbers into the computer based final expense quoting engine and let it calculate the premiums for you which will compare all different carriers.
Final Expense Quoting Option 1
So let’s go ahead and get started on how to calculate final expense premiums with the first method. So I am going to go ahead and move over to my computer and we are going to demonstrate this on the computer. Okay so here we are with the first process or the first way to calculate premiums; we are going to look at living promise with Mutual of Omaha here and on their rate program here’s what you have; you have annual premiums per $1,000 of coverage is what we are looking at and this is for the level benefit plan They also have these same for the graded and then they have the accidental death benefit rider. So basically what you are going to do is let’s say we want to run a quote for a male, non-tobacco, 50 year old, so we will take 50 years old as the age , male, non tobacco and we will find the modal factor and this is for annual premium per $1,000 coverage. So if you want to run a quote for say $10,000 of coverage you are going to take the 29.16 and multiply it by 10. That’s going to give you the annual premium for the insurance of $291.60. Now you need to add the carrier’s policy fee at this point, so we are going to add 36$ to that so your annualized premium for this policy would be $327.60 so if they want to pay annually they are just going to write you a check for that amount. Most people are going to want to do the monthly BSP so we are going to take the annual premium and multiply it by this factor here. A lot of agents think you get this number and divide by 12 and that gives you the monthly premium, well that’s not the case. You actually take the annual premium, $327.60 and multiply that by .089 = so on the calculator I got 29.1564 so we round that up to 29.16 so the monthly premium on bank draft for this person is going to be $29.16 that is method 1.
Final Expense Quoting Option 2
Okay so now let’s take a look at option 2. For this option I switched to a different carrier because this other final expense carrier that I’m looking at now offers, they already pre-calculated rates for you. Some carriers have done that, some have not. So with this carrier which is Royal Neighbors we are going to take a look at how they pre-calculated it out based on so this is a simple life issue whole life non-tobacco EFT premium so they already did the calculations for you this is just going to show you how much it’s going to cost per month. So if we are looking at a male, and let’s do aged 50, we want to do $10,000 of final expense coverage we’re gonna look at a monthly premium with this carrier of $37.91 for the non-tobacco. So basically with this method you are taking the rate card where they’re already calculated out for you and your cross referencing and you take the age, the amount of insurance the person wants, and then whether or not their male or female. Now make sure you are on the correct sheet, they have a non-tobacco they have level benefits, graded benefits, and such so just make sure your on the proper sheet and its basically cross referencing and looking it up.
Final Expense Quoting Option 3
And now let’s get into the 3rd option and this is by using a final expense quote engine where you can just plug the information in and it runs the quote for you. So we’re gonna go with somebody who was born in 1957, we will do a male, no tobacco, let’s do 10,000 and we want to go with a level benefit. So we plug in the information into the quote engine and you tell it to get quotes now. What this is going to do is list them out in order of lowest final expense premium down to the bottom where it’s the highest premium is. And you can just take a look here and it’s going to quote out all of the carriers so maybe you want to change the age on this and you want to run a quote on this, so you can change the age, you can change if they use tobacco or not, you can change their gender, you can change the quote amount, you can change if you want to go to a graded or modified or maybe the person doesn’t qualify for the graded or modified final expense plan and you go to the guaranteed issue final expense program. So you just pick out the plan type and click on submit and recalculate these rates and there’s that 29,16 we did earlier for a male, non-tobacco with Mutual of Omaha final expense. And so it calculates out the premiums so this is the 3 methods for calculating premiums. Now let me go back here, also you’ll see on our website where many of the carriers have their own individual quoting engines where you can access those as well. So Foresters, Transamerica, Mutual of Omaha, they’ve got their own quoting engine if you want to run carrier specific. You can sometimes download their app or access these on the Internet as well.
Final Expense Training
Okay so now that you have a understanding of how to calculate final expense premiums for your clients and final expense, I wanted to give you that password that I promised at the beginning of the video. First off, thanks for making it to the end of the video, if you enjoyed the video, if you liked it make sure you give the video a thumbs up and Also subscribe to our Final Expense Training Youtube Channel that way every time we release a new video you’ll get notified. So when you click on the subscribe button you’ll see a little bell next to it, so subscribe then click the bell that way you get notified each time we upload a new video. So to get to the online quoting calculator system on our website, there’s a link below this video that will link you over to the website you go to the quote engine and it’s going to ask for a password at this point, you’re going to type in the word quotes…q-u-o-t-e-s all lower case just plug that in and it’s going to bring you to the quote engine where you can run quotes for the carriers that are listed in there and that’s it , thanks for watching, have a great day, we’ll see you soon!