Conservation - can a client waive?

[MAnnuity]

Client trying to surrender a life policy with some cash value. Being told by the insurance company that the only way to waive the "15 day conservation period" is if the agent calls the insurance company.

Why can't a client waive this on his own? It's their money?

 

[WinoBlues]

Client trying to surrender a life policy with some cash value. Being told by the insurance company that the only way to waive the "15 day conservation period" is if the agent calls the insurance company.

Why can't a client waive this on his own? It's their money?

What company?

 

[Lloyds of Lubbock]

Depending upon your state i believe an insurance company has a cetain amount of days in which they have to surrender the proceeds.
This is done to prevent a "run on the bank".

 

[Allen Trent]

Depending upon your state i believe an insurance company has a cetain amount of days in which they have to surrender the proceeds.
This is done to prevent a "run on the bank".

Also allows for time for agent and company to try to keep it on the books in case they were being talked into an undisclosed replacement, etc. basically, many agents get pissed if company just lets client cancel something the agent knows was extremely important to client. So, agent wants common courtesy to contact client to conserve or authorize it be waived

 

[rousemark]

Client trying to surrender a life policy with some cash value. Being told by the insurance company that the only way to waive the "15 day conservation period" is if the agent calls the insurance company.

Why can't a client waive this on his own? It's their money?

Many policies have a clause in them that allows the company to delay payout of cash values up to six months. The purpose is to prevent a run on the company assets but there is nothing to prevent a company for using it for other reasons.

 

[shonceman]

Also allows for time for agent and company to try to keep it on the books in case they were being talked into an undisclosed replacement, etc. basically, many agents get pissed if company just lets client cancel something the agent knows was extremely important to client. So, agent wants common courtesy to contact client to conserve or authorize it be waived

Exactly!

I get pretty steamed when I find out after the fact that a policy was surrendered. I have one carrier that has a lot of definite pluses, but a big negative in that they don’t notify me on anything! No phone call, email, or even snail mail. No policy info on the internet. I get a late payment list once a month on the 15th, so at least I can see people whose bank draft didn’t go through.

But I really hate it when they just mail out a surrender form without telling me! So, I don’t find out about it until my late/lapse list shows that the policy was surrendered, which is usually too late to salvage it. Many of those clients just need cash for some emergency need, and think they have to cash in the policy in order to get it. They would often be better served by a policy loan, which the agent can explain better than a home office customer service rep.

 

[Allen Trent]

Exactly!

I get pretty steamed when I find out after the fact that a policy was surrendered. I have one carrier that has a lot of definite pluses, but a big negative in that they don’t notify me on anything! No phone call, email, or even snail mail. No policy info on the internet. I get a late payment list once a month on the 15th, so at least I can see people whose bank draft didn’t go through.

But I really hate it when they just mail out a surrender form without telling me! So, I don’t find out about it until my late/lapse list shows that the policy was surrendered, which is usually too late to salvage it. Many of those clients just need cash for some emergency need, and think they have to cash in the policy in order to get it. They would often be better served by a policy loan, which the agent can explain better than a home office customer service rep.

yup. and some clients that merely wanted to cancel because they retired & didnt want to pay premium on a decades old participating policy don't realize they could have the dividend pay part or all of premium or PUAR or even worst case elect RPU. Some that don't even want the cash to blow but want premium commitment gone end up walking the CV down the street to a bank at 0-1% with no tax free death benefit. Some of the oldest policies later get a 1099 for taxable gains & clients call you the agent pissed because no one told them, etc, etc

I think this conservation window today is way less about holding client hostage for a run on the bank thinking. I think it is a common courtesy to client & agent. Many carriers want those old life & annuity off the books because they were priced under old interest rate assumptions, so they have no reason to play hard ball with clients cash value