5 Reasons You Should be Thinking About Converting Your Clients’ Term Policies Earlier Rather Than Later.
You wouldn’t believe how many gasps I have heard from clients who have had a 15 or 20 year term they are paying practically nothing for when they hear the new rates they must pay now because they are older or not as healthy. It’s disheartening to hear “I simply can’t afford that.”
How often do you think about converting your client’s term policy? Converting term earlier rather than later can be a great advantage to your clients, and conversions are a huge sales opportunity for you!
Perhaps you don’t think about it after the sale or you are not familiar with the permanent products so you hesitate to suggest a conversion. Let’s look at some advantages:
- NO medical underwriting with conversions – even if your client’s health has changed
- Converting early offers greater permanent life benefit options – locking in better products and premiums that are more affordable for your client for the rest of their lives!
- You can convert a term policy even if you were not the original writing agent
- Partial conversions are available with most carriers – offering you an opportunity to be more creative with the plans and cost
- New commission for you
What about partial conversion?
Did you know you could do a partial conversion giving your client a more cost effective way to buy some permanent life insurance today? Let’s look at an example:
Joe has a family that he is protecting with a $500,000 20 year level term plan. He was 38 and in good health when he bought it 8 years ago paying $28.50 monthly. When he gets to the end of his level premium period and still needs coverage, another 20 year term will cost him $146.05 monthly or $731.41 for Guaranteed Benefit UL if he is still healthy! Both options are a bit tough to swallow since he had only been paying $28.50 a month up until now.
A better choice might be to convert $200,000 in the 8th year for $232.89 monthly for a guaranteed benefit universal life guaranteeing that rate to age 105. Then leaving the balance of the term, $300,000 in place for $17.10 monthly until the end of the level premium period, and then letting this policy expire.
Advantages to this plan:
- No medical underwriting to make the change
- Permanent life insurance coverage NOW, at a younger age
- Better choice in products available for conversion when done earlier rather than later – many carriers have limitations as to which products are available for conversion at certain points in time
- Your client will appreciate you taking care of them
- You have a new sale
Your clients have a contractually guaranteed opportunity with conversions. Why not have them take advantage of it before they get too old or the only product available is unattractive. Give your client a call now to discuss their options.