The California Collection/TheCaliforniaCollection.cdr/his081/alw1.lzh/ALW1.TXT

Text File | 1991-06-29 | 7.6 KB | 165 lines

WAR:A.L. Williams - Milker of Millions!

   Some "insurance" things you might want to know - just in case an
A.L. Williams "agent" comes knocking on your door - trying to get you
to "convert" your life insurance. Beware... I was told this was a
"Christian company" by two of their agents.... neither were unlicensed
by the State of Wisconsin.

   These are published quotes - you probably won't hear from the
"agent".

   "(The way) A.L. Williams is selling life insurance (is) similar to
the way (some companies) sell household products...the concept is...not
highly professional" Virginia State Insurance Regulator, P.A. Synnot
Jr. in the Times-Herald, Richmond Virginia, 8-13-82.

   "I don't think anyone is well served by part-time insurance agents.
It's like being served by a part-time dentist." John Pugh, CLU, Member
Million Dollar Round Table, Area Mgr. Mass. Mutual.

   "They come across as white hats, crusaders - informing you about the
evils of 'whole life'... what they don't tell you is that they're
selling a very expensive kind of term insurance." Investigator's
Report, Dallas Better Business Bureau.

   "...ALW...displays some of the characteristics of a chain letter and
like a chain letter will sooner or later run out of..prospective
customers. Until (then)...we fear that many people are going to be
seriously hurt. Among those...are persons who replaced policies that
should not have been replaced...(and) persons who buy high-cost term
insurance when they should have purchased low-cost term insurance..."
Joseph M. Beith, Indiana Univ. Prof. of Insurance, Insurance Forum, 4-81

   "The basic term policy that Williams sell has that striking fat
first-year premium, virtually all of which goes to pay agents'
commissions." Rhonda S. Brammer, Insurance Journalist, Barrons 1-24-83

   "I believe the sales activites of ALW are designed primarily for the
purpose of channeling the cash values of existing life insurance
policies directly into commissions for members of the ALW organization.
Joseph Beith.

   What is A.L. Williams? How does it work?

   1. Pyramid approach to selling life insurance (particularly the
concept "buy term and invest the difference". Williams uses a modified
or deposit term policy, plus and annuity)

   2. Recruit primarily part-time agents. Provides sufficient training
to enable agents to pass State insurance exam. Ask applicants to have a
list of 25 prospects to make initial calls on. These prospects also
become possibilities for additional part-time agents....hence the
pyramid.

   3. Agents are encouraged (although not "officially"), to propose to
clients that they cash-in existing whole life policies and use these
values to fund the new policy being sold by Williams.

   4. A.L. Williams was established in March, 1977. Home office is
Atlanta Ga.

   5. Agents are independent contractors. As such, there is no
responsibility on the part of the general agent, (A.L. Williams), or
the company for possible misrepresentations or exaggerated projections
made by the agent.

   A.L. Williams has been the subject of a great deal of controversy,
investigations, negative publicity, litigation and court actions since
they began their particular sales approach in 1977.

   1. They were taken to court in the state of Texas for $60 million
for fraud and misrepresentation (Best Insurance Management, Nov. 1981
issue)

   2. They were refused a license to sell in the State of New York.

   3. In 1981, the State of Texas canceled 3,000 of their agent's
licenses for one year as a punishment for a flagrant violation of one
of that state's insurance regulations.

   4. In 1982 they were the subject of a cease and desist order by the
State of Kansas and fined $13,500.

   5. In 1982 also they were the subject of a cease and desist order by
the state of New Jersey and were also fined.

   6. In 1980, one of the techniques being used by the Williams
organization was found to be illegal by the State of Indiana.

   7. State of California Insurance Dept. accused A.L. Williams &
MILICO of distributing to the public a booklet containing false and
misleading information about life insurance during the period of Feb.
1986 and Jan. 1987. (article in National Underwriter, October 3, 1988)

   Is A.L. Williams a good investment? Consider this:

   "The competition will come back and they'll say, 'Well 14%? Well, we
can show that our mutual funds have done better than that.'" - A.L.
Williams, Monday Morning Managers Meeting, August 25, 1988.

   What REALLY happened though?

   A 16% net loss on the total investment. This is taking in
consideration the 8.5% commission paid and the -8% loss on the
investment from July 1, 1987 to June 30, 1988. You can read about it in
Forbes Magazine, Sept. 5, 1988.

   Remember though, the A.L. Williams agent made 8.5% commission though.

   Analyzing 1,224 mutual funds by total return (price gains or losses
per share plus distributions, for 12 months ending June 30) Kiplinger's
Magazine listed Common Sense Growth and Income as number 1057. Common
Sense Growth Fund ranked slightly higher: No. 977. Both funds ranked in
the bottom 20% of Changing Times' overall 12-month performance survey
of 1,224 mutual funds.

   Changing Times ranks Common Sense Growth and Income as "9" on a
scale of 1-9, with 1 being the safest and 9 being the greatest risk.
The growth and income fund ranked a shaky "6".

   Considering the relative 12-month performance of the Common Sense
funds, anyone with real common sense would probably be better off
investing in good ole "Horse sense" than A.L. Williams.

   Here's some timely honest and unbiased advice from the Metropolitan
Better Business Bureau of Dallas Texas:

   "The Better Business Bureau cannot advise consumers which insurance
program to purchase, but offers these tips to those who have been urged
to replace their whole life insurance with deposit term insurance:

   1. Contact your present insurance agent, and closely compare
benefits of both your present policy, and the one you are being
offered. Find out what benefits you may lose when you switch.

   2. Make sure you get an accurate comparison statement between your
present policy and the offered deposit term policy, which may also be
known as modified premium renewable term. Verify the comparison
statement with your present agent.

   3. If the difference between the price of whole life insurance will
be invested for you. Determine the details of the investment, and find
out if promised returns are guaranteed or are estimated.

   4. If the salesman represents himself as a "financial planner," find
out if this means he is a certified financial planner, who may have a
permanent insurance license, as well as be licensed to sell securities
and real estate, and be knowledgeable about tax shelter programs. If he
is not, ask about the salesman's license, experience, and training.

   5. If you have decided that term insurance is the best buy for you,
comparison shop the different types of term insurance and ask your
present agent to prepare a proposal to you.

   6. The deposit term insurance offered to you may actually be
modified whole life, which may convert automatically at the end of the
term to a whole life insurance policy. Unless the term insurance is
renewable. If this is the case, ask the salesman why, if whole life is
so undesirable, he is offering a deposit term policy that automatically
converts to whole life."

   (You can contact the Better Business Bureau at 1511 Bryan, Dallas,
TX. 75201 for more information about A.L. Williams' activities in the
Dallas area.)