CONVERSION: The Lost Sale
It just occurred to me, while I was on a term-status phone call, to remind the producer about conversion. Interestingly, the agent said that she didn’t know what I was talking about. After an explanation, she asked for an illustration of what conversion might cost for both the term policy she asked about and another one, as well.
Then, I thought – what a great reason for calling all of our producers. They could have their office staff create a call list for all current term policy owners and make calls to explain conversion and urge them to convert, either all or part of the coverage, NOW while they are young and can get their medical classification on the new policy without the need to qualify. Those carriers that still allow conversion to GUL would be a special target market because of AG 38.
Most policyowners and – as I’m finding out, a few producers – don’t even know that term policies have this option. A $100,000 here and a $100,000 there….it could add up.
More term policies have limited conversion periods. Prudential’s “Essential” term, for instance, is only convertible during the first five years. Since it came out five years ago, I’ve gotten several calls from agent’s that ask me why their clients are getting notices from the carrier about the conversion period “closing out”.
Remember, policyowners don’t typically have to convert the entire death benefit from term to permanent. They can keep a portion of the term in force at a proportionately lower premium. There is usually a minimum amount that must be converted, however…usually $100,000.
Unfortunately, fewer and fewer carriers are allowing conversions to GUL. Check first to find out to which policy or policies carriers will permit conversion before illustrating possible conversion scenarios. WinFlex Web does not know if you are running a conversion illustration or an illustration for a new policy (exception – Banner; there’s a box to check).
Talk to all of your agents about conversion. It’s a good reason to call them and be sure to bring it up when you visit their office. Some carriers (notably Transamerica) will provide us with lists of in force term plans that are eligible for conversion. This should immediately go to your list of topics for discussion with all agents and wirehouse advisers.
