LEAP system for marketing life insurance
beli...@aol.com
system to market whole life insurance.
What is the LEAP system, and why is it controversial? I see that
Joseph Belth has written some skeptical articles in the Insurance
Forum on it, but I don't subscribe to his publication.
Brent D. Gardner, ChFC
I've had several LEAPers explain the system to me, and I have to admit
that much of it didn't take. The terminology is a little fuzzy; they
use words like 'turbocharged money' and stuff like that.
I know that this system helps persuade people to purchase vast sums of
whole life insurance.
One of the highlights is that you can borrow your own money, then
deduct interest payments, as long as the money borrowed was for
investment purposes. I'm not sure how they deal with wash loans, since
that's available on darn near every permanent product now. Perhaps
they are deducting interest payments made back into the contract, even
though they are 100% credited back to the policy? I just really don't
know. Perhaps Ed can jump in and explain how most personal interest
payments are not deductible, and where there may be an exception.
The real problem I see is that, as far as I know, it has never been
approved by the NASD or a broker/dealer for sales purposes. Even if
you only use it for whole life, color me crazy, the regulators would
find a way to nail a registered rep in one way or another. I'm not
interested in getting in trouble, so I've avoided paying the $3,000
toll for the seminar on the system.
I was told by someone at NYLIC that they were trying to get it past
their internal compliance department, earlier this year. I have no
idea if they ever did. Guardian agents are known to use the system,
probably more than any other company. I have no idea if they have it
'officially approved' or not. The people who use is swear by it. In
some cases, they totally change how they do business. I've never met
anyone who attended the seminar who came back saying it was bogus --
they all thought it was the real deal.
Perhaps why I'm not convinced is this: If it was all it cracked up to
be, insurance companies would be all over it like flies on honey. This
casual unwritten endorsement stuff isn't good enough for me. When I
see Guardian, Mass Mutual, Northwestern Mutual and NYLIC company
produced literature with LEAP on it, I'll change my mind. Until then,
I'm a doubting Thomas. =)
TTRoberts
<< <i>I have purchased a whole life policy from a company that uses the LEAP
system to market whole life insurance.
What is the LEAP system, and why is it controversial? I see that Joseph Belth
has written some skeptical articles in the Insurance Forum on it, but I don't
subscribe to his publication.</i> >>
The LEAP (Lifetime Economic Acceleration Process - as you may already know what
the acronym stands for) is actually a SYSTEM to help life insurance
agents/brokers sell more life insurance, in particular . . . Whole Life
insurance. It's designed to help the agent sell higher amounts of whole life
insurance using a particular "philosophical" point of view. This philosophical
point of view mainly has to do with concept of "velocity of money" and tries to
incorporate other financial concepts like "time value of money" into that
philosophy. And so, the bottom line turns out to be . . . buy as much Whole
Life insurance as you can afford and don't use any other system of determining
one's life insurance needs/wants.
It tends to be very controversial because those who've actually bought the
system will not or can not discuss the details of the system to outside
sources. So, in effect, unless you're a member of the cult like group, you not
authorized to know how it works and why.
If you go to their web site, about all you can find out is there (
http://www.leapsystems.com/ ), though it really doesn't answer your or anyone
else's question(s). The best place to get such question answered is to pay the
exorbitant fee to attend one of their seminars where they SELL the system to
life insurance producers.
Brent D. Gardner, ChFC
Interestingly enough, I received this in my email today:
http://pmiinc.com/ownbankclients.html
I suspect, based on the concept of "being your own bank" and the
testimonials on this page, that LEAP and Pam's new seminar have
something in common. This isn't an endorsement of Pam Yellen, but her
10 hour seminar is a heck of a lot cheaper than LEAP, and she has some
kind of money back guarantee.
Tad Borek
> If you go to their web site, about all you can find out is there (
http://www.leapsystems.com/
> ), though it really doesn't answer your or anyone else's
> question(s). The best place to get such question answered is to
> pay the exorbitant fee to attend one of their seminars where they
> SELL the system to life insurance producers.
I remember looking that site over a couple years ago...I'd hardly give
it a glowing endorsement (from the investor's perspective) based on what
they put up on the "consumer" side of the site. I'm all for things that
help people to save/invest, and to understand the process. But it's full
of trite statements, nonsensical language, and just plain bad writing.
The pages on things like compound interest, IRAs, and dividend
reinvestment look specifically tailored to confuse uninformed investors.
They're repeatedly making the point "tax deferral is good" but clouding
the issue in the process. You don't need to talk someone out of an IRA
contribution to sell them whole life insurance, and I think it's a bit
irresponsible to do so. If an agent using LEAP or SPIN or AIDA or
whatever convinces someone with no savings to sign up for whole life,
great. If they stop contributing to their 401k and IRA to do so, or sign
on for more premium than they can afford, not so great (I recall that
exact scenario in an article on one of the more aggressive LEAP
practitioners).
-Tad
RSunder198
salesman a few years ago.
Seems that the lady of the house got a lump sum distribution from her company's
retirement plan when she quit to be a full time mom, and she rolled it into an
IRA at the credit union paying 4%, pending a decision on what to do with it
long term. This LEAP guy smelled the money and came in to talk about velocity
of money and all the other stuff they like to pass gas on. He succeeded in
persuading them to take $10,000 a year out of the IRA holding her pension
rollover to pay premiums on a whole life policy. Net after tax and penalty,
they didn't have $10k left, but whatever they had went to the policy. There
was enough for 10 to 15 years of premiums and then the policy would coast on
dividends -- based on the then current dividend scale, which probably didn't
hold up. Long story made short >> I derailed this scheme, got them to put the
pension money into a Vanguard IRA, got threatened with a lawsuit from this
LEAPer, and in many other ways had a good time. The LEAPer is out of the
business now, as far as I know, and these folks continue to buy their auto,
home and term life insurance from me. I'd maybe try to sell 'em whole life or
one of its variations if I could think of a reason for them to own some ... but
I can't.
ron in iowa
Brent D. Gardner, ChFC
Ron!
How's it going up there in God's country? =)
So the guy threatened you with a lawsuit because you derailed his sale
- now that's funny!
Anybody participating on the AOL boards anymore? I dumped them earlier
this year when I got a bill for $1,500 - for one months service.
Good to see you participating here.
RSunder198
What did you DO, man? leave the phone off the hook? sheesh.
The AOL boards are "quiet."
ron in iowa
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