LEAP system for marketing life insurance - misc.invest.financial-plan

Message from discussion LEAP system for marketing life insurance

Brent D. Gardner, ChFC

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More options Oct 15 2002, 5:45 am

Newsgroups: misc.invest.financial-plan

From: brentgard...@sbcglobal.net (Brent D. Gardner, ChFC)

Date: Tue, 15 Oct 2002 04:41:53 CST

Local: Tues, Oct 15 2002 6:41 am

Subject: Re: LEAP system for marketing life insurance

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beliav...@aol.com wrote in message <news:3064b51d.0210140923.985dd12@posting.google.com>...
> 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'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. =)

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