Need Help Replacing Policies

But a sale is better than no sale.

Not always the case. You replace a policy that was out of the contestible period, client dies within 2 years of the new policy and is rescinded and beneficiary gets nothing. Maybe better for your commissions but definitely not for the client and their family.
 
Not always the case. You replace a policy that was out of the contestible period, client dies within 2 years of the new policy and is rescinded and beneficiary gets nothing. Maybe better for your commissions but definitely not for the client and their family.

Not even better for the agent. I'm not aware of any company that will allow the agent to keep the commission if it is rescinded. Also, it was said in the context that it is better to add on and take a smaller commission than to go for the replacement, lose and get nothing.
 
Not always the case. You replace a policy that was out of the contestible period, client dies within 2 years of the new policy and is rescinded and beneficiary gets nothing. Maybe better for your commissions but definitely not for the client and their family.

So should we never replace anything after contestibility even if it offer a better deal for the clients?
 
So should we never replace anything after contestibility even if it offer a better deal for the clients?

Depends on the situation and the client. I make sure they are aware of a new contestibility period everytime I replace a policy. If I am giving minimal savings by replacing the policy I usually tell them to stay put with where they are at. A dollar a month savings not typically worth a 2 yr contestibility period....I look at it as a $12 per year expedited claim payment fee. Just because there are no suitability forms for final expense, doesn't mean you shouldn't have the clients best interest in mind.
 
Depends on the situation and the client. I make sure they are aware of a new contestibility period everytime I replace a policy. If I am giving minimal savings by replacing the policy I usually tell them to stay put with where they are at. A dollar a month savings not typically worth a 2 yr contestibility period....I look at it as a $12 per year expedited claim payment fee. Just because there are no suitability forms for final expense, doesn't mean you shouldn't have the clients best interest in mind.

I was just playing devils advocate. I always tell the client all their options and advise them with what is in their best interest. Sometimes they still do what they want.
 
I met with a couple on Wed. and the wife had no insurance. The husband had a $10,000 whole life that was 3 and half years old. Their "why" was her. But after we got her application taken care of he wanted me to see if I could save him money. I couldn't. The best I could do was $5/mo more for the same coverage but he had $600 cash value in his policy. He semed like that was a good idea to him. I'm not sure his health is as good as he says it is so I advised him to leave it alone for now and think about it. I did tell him that when I brought his wife's policy to them that we could revisit it and see if he still wanted to change. Another issue was that we were in Ky and Settlers looked to be the best fit for him and they won't allow replacements here.

I called the lady this morning to tell her that her policy is approved and she told me that her husband does want to get the cash value.

Bottom line is that every situation is different. Also, is better today worth the risk of a new contestability? You have to consider all pertinent information before giving advice. But without the "why" none of it matters.

Great delayed soft close, hey I'll let you think about what you could do with a $600 check for 5 per month. Love it.
 
Great delayed soft close, hey I'll let you think about what you could do with a $600 check for 5 per month. Love it.


It does appear that way but it's not my intent. I'm going to tell him when I go back that I think he should keep his policy. He's 81 years old and misspoke earlier on the face amount, it's $6000 and not being able to use Settlers it would be more than $5/mo for a new one.

If, however, he is going to do it with or without me then I'll chose with.;)
 
What are some of the main reasons a company would deny a claim during the incontestabilty period?

Obviously lying, but what others??
 
What are some of the main reasons a company would deny a claim during the incontestabilty period?

Obviously lying, but what others??

Most of the FE companies will leave no stone unturned to deny a claim. There's a very good reason that companies will not make public their percentage of paid contestable claims.
 
Not even better for the agent. I'm not aware of any company that will allow the agent to keep the commission if it is rescinded.
Not to mention the fact that you may end up having to fork out the deductible on your E&O when they sue you and win based on the claim that you recommended an inappropriate replacement.
 
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