Term Insurance is designed to provide coverage for only a specific duration of time (10, 15, 20, 30 years). However, almost every term policy sold through us includes a provision allowing clients to convert their term policy into a permanent insurance policy – without requiring any new medical underwriting.
One of our brokers shared how they use this provision to create additional sales while also providing clients with a solution that they can rely on for the rest of their lives. During the initial sales discussions, they promote this conversion privilege, working with the client to determine how much coverage they would need and how quickly they could afford to exercise this option.
Since the pricing for the permanent insurance is based on the client’s attained age at the time of conversion, the sooner that the client converts their coverage, the less expensive it will be.
The client does not need to convert their entire term policy at once and can make use of multiple partial conversions to help keep premium costs low while providing added flexibility.
For example, if the client decides to purchase a 10 term policy for a $1M face amount, they could potentially convert $500K next year, $250K more in 5 years, and then make a decision whether they want to convert and maintain the remaining $250K towards the end of the level term period.
Far too often, the discussion of how and when to exercise a term conversion option is a reactive one, taking place when the level term coverage is about to end or shortly after the client has experienced a change in health for the worse.
Talk to your clients about why it makes sense to take advantage of the conversion provision. Explain how they can keep their initial term policy rating for the rest of their life without having to re-qualify in the future. It’s another great reason to stay in contact with your client and could even create new sales and/or referral opportunities with their family and friends.
Oh, and did we mention that you collect a new commission for each conversion sale you make? Your Life Sales Rep is here to help – contact us today.
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