What You Need to Know
- Some older holders of convertible life coverage will want to keep the coverage as is.
- Some may prefer to convert the term coverage into permanent coverage.
- Consumers who no longer want coverage may like the idea of selling their policies.
Convertible term policies on insureds over age 65 often make the best candidates for a life settlement. Term policies are everywhere, but how do you find them? All you have to do is ask.
Here are two questions to help you — you never know what asking these questions will uncover.
1. Do you own any term insurance?
2. Can I take a look?
Depending on the age, needs and circumstances of your client or prospect, here are the most likely outcomes:
- No current changes are necessary, but important future dates like the end of the conversion period or the expiration of the initial premium guarantee are identified.
- Some or all their term insurance is converted to permanent coverage.
- The term is rewritten for a policy with a lower premium, a longer premium guarantee or a longer conversion period.
- More coverage is required and new insurance is sold.
- Some or all the coverage is found to be unneeded, unwanted or unaffordable and becomes a prospect for a life settlement.
In just about every situation, you have the opportunity to benefit the policyowner, as well as to make a commission for yourself — a win-win for everyone.
Here are several places where you might not think to ask, but where there are potentially lots of term policies that should be reviewed.
1. Property Casualty Agencies
They often have large amounts of term insurance on their books, for both individual and business clients.
Frequently, they require term insurance to cover loans, mortgages, etc., and as the loan principal goes down or is paid off, the amount of term required will go down as well.