10 Yr. Term Conversion Questions

[CALTCAgent]

I am not very familiar with conversions.

Has a 10 yr. term plan. Didn't know much more about it as I was talking to the daughter.

She wanted to know about making that permanent and/or getting more coverage.

Background:

Age 64
5'-4", 270 lbs., non smoker

Health: severe arthritis, uses 2 canes to walk.
Takes only ibuprofin for arthritis and pain associated with it.

Of course I will review and call the company. But prior to that I must speculate a bit to be prepared.

1. Do 10 yr. terms often allow conversions ?
2. How does an agent get compensated or not ( new AOR ? )
3. What are the good companies to look for conversions ?
4. Any companies to not bother with ?
5. Any other life insurance for a person with this health history ?

Any help, ideas, suggestions is appreciated,

Thanks!

 

[Larry Tew]

I am not very familiar with conversions.

Has a 10 yr. term plan. Didn't know much more about it as I was talking to the daughter.

She wanted to know about making that permanent and/or getting more coverage.

Background:

Age 64
5'-4", 270 lbs., non smoker

Health: severe arthritis, uses 2 canes to walk.
Takes only ibuprofin for arthritis and pain associated with it.

Of course I will review and call the company. But prior to that I must speculate a bit to be prepared.

1. Do 10 yr. terms often allow conversions ?
2. How does an agent get compensated or not ( new AOR ? )
3. What are the good companies to look for conversions ?
4. Any companies to not bother with ?
5. Any other life insurance for a person with this health history ?

Any help, ideas, suggestions is appreciated,

Thanks!

1. Most do (either to a pre-selected product which is usually not a good one or to any product in the current line at time of conversion.

2. Full comp (minus the term conversion credit if applicable). AOR? Depends on if they already have an active servicing agent with the insurance company. If they have an agent and you're not appointed with that company, expect problems.

3. It varies. are you talking about looking for existing term written by other agents or are you asking about better companies for you ti write term with and convert later?

4. Not sure.

5. Best bet is to get detailed information and talk to underwriting.

 

[pfg1]

I would read the existing policy. That will tell you what is allowed with that company/product.

Are asking if you can convert the current term policy into a perm policy with another company? No, typically you can only use the existing company.

 

[LGilmore]

1. Do 10 yr. terms often allow conversions ?

If it carries that provision in the policy, yes.

" 2. How does an agent get compensated or not ( new AOR ? )"

Yes, you would be compensated, license with the carrier.

" 3. What are the good companies to look for conversions ?"

Too late in this case. Already has a product, you need to get the details (get an AOR) and call and ask what products he can convert to. If you're looking for good companies to sell convertible term with, look at what or how many choices they offer for conversion.

" 4. Any companies to not bother with ?"

well, any that you can't license with come to mind.

" 5. Any other life insurance for a person with this health history ?"

I dunno, take a look and see.

The big thing is find as much as you can about what he has. If he had a better class then, than now, conversion usually is the best path.

 

[CALTCAgent]

I would read the existing policy. That will tell you what is allowed with that company/product.

Is there usually a "conversion" section in the policy ?

Hopefully I can read it quickly.

Are asking if you can convert the current term policy into a perm policy with another company? No, typically you can only use the existing company.

That is something I was also curious about.

I thought I was hearing something about a carrier allowing that a few years ago.

So that is not an option.

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" 3. What are the good companies to look for conversions ?"

Too late in this case. Already has a product, you need to get the details (get an AOR) and call and ask what products he can convert to. If you're looking for good companies to sell convertible term with, look at what or how many choices they offer for conversion.

I wanted to know that, so I will know a little more when I hear the name of the company somebody has.

I assume what was a good carrier in the past may not be a good one now to sell for conversions.

" 4. Any companies to not bother with ?"

well, any that you can't license with come to mind.

So captive companies, like NYL ?

Thanks for the responses from all so far !

 

[WinoBlues]

Is there usually a "conversion" section in the policy ?

Hopefully I can read it quickly.



That is something I was also curious about.

I thought I was hearing something about a carrier allowing that a few years ago.

So that is not an option.

A conversion option will be in the policy but the options change and usually for the worst.

There are/were a couple companies that would let you convert recently issued preferred policies to dome of their plans. I can not think of any currently do that. Doubtful he was preferred, could have been rated.

 

[CALTCAgent]

3. It varies. are you talking about looking for existing term written by other agents or are you asking about better companies for you ti write term with and convert later?

I am interested in both.

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A conversion option will be in the policy but the options change and usually for the worst.

Do you mean as it gets further along in years in the term, the conversion options become less attractive in some way ?

There are/were a couple companies that would let you convert recently issued preferred policies to dome of their plans. I can not think of any currently do that. Doubtful he was preferred, could have been rated.

I doubt preferred as well in the last few years at least.

Has had the arthritis for many years, it has really gotten worse (affected mobility) in the last couple of years.

I think they were on Disability because of it.

Wondering why they didn't do knee replacements. They are still young enough.

Probably more to the story.

I am starting to think the conversion option has a low probability of making sense.

 

[WinoBlues]

I am interested in both.

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Do you mean as it gets further along in years in the term, the conversion options become less attractive in some way ?



I doubt preferred as well in the last few years at least.

Has had the arthritis for many years, it has really gotten worse (affected mobility) in the last couple of years.

I think they were on Disability because of it.

Wondering why they didn't do knee replacements. They are still young enough.

Probably more to the story.

I am starting to think the conversion option has a low probability of making sense.

No I mean the option may have a time limit. Do it by X or lose the option.
An example on a ten year term would be "convertible within 5 years or age 70 whichever comes last"

I would definitely look at conversion as an option first. I have converted many policies, can be very quick and easy.

Company that has both low rates and good conversation options is Ohio National. Comp suck though if not your primary. The new TermULs all have different options. Some you get paid on some not.

I AOL just about every plan I come across. Whether I do anything with them now or not, inventory.

 

[CALTCAgent]

No I mean the option may have a time limit. Do it by X or lose the option.
An example on a ten year term would be "convertible within 5 years or age 70 whichever comes last"

I would definitely look at conversion as an option first. I have converted many policies, can be very quick and easy.

Oh ok, this is good to know. The daughter must take time off from work to meet me, and I don't want to waste her time.

Company that has both low rates and good conversation options is Ohio National. Comp suck though if not your primary. The new TermULs all have different options. Some you get paid on some not.

I wonder what the original writing agent, if still around, will/can do to get involved.

I AOL just about every plan I come across. Whether I do anything with them now or not, inventory.

I guess that opens up opportunities for more business in the future.

 

[WinoBlues]

Oh ok, this is good to know. The daughter must take time off from work to meet me, and I don't want to waste her time.



I wonder what the original writing agent, if still around, will/can do to get involved.



I guess that opens up opportunities for more business in the future.

You could simply do a three way call with the owner and company. Ask if the agent is current and about conversion, order a conversion illustration. Also get an informed so that you can show what the renewal premium will be (sticker shock) so that it makes sense to convert or rewrite. Also if you wind up not doing anything now you have something to show them the year before it renews. Have everything emailed or faxed to you.

If the old agent is like most he has not kept in touch so I would poison the water by asking if they have serviced the policy.

The company name would be very helpful. I would go in with rewrite options as well. Not weighing one over the other till you have all the facts.