Just left NASB (warning to other future naive noobs)

[theinsuranceman]

So what do you do when an unethical replacement like this occurs ?

What do you tell your down lines to do ?

Insured doesn't have the money to pay back premiums for reinstatement.

Now what ?

You sound as if you're asking about writing a new policy on someone who has a lapsed policy. That's not a replacement.

A replacement is when you talk Ms. Jones into dropping her current policy or policies (even the ones that have passed the 2 year contestability period) and starting a new policy with you (just so you can make an advance). Especially bad if she has a graded/modified/GI past the waiting period. You really hurt this insured just so your broke arse could get an advance.

The only person that's been helped in this situation is the "broke" broker. Think about the recruiters up here who are always bragging about doing the right thing because it's the right thing to do rewriting Ms. Jones a new policy because now she can save $5 a month. What a disservice to Ms. Jones.

How can anyone with honesty and integrity say this is doing the right thing because it's the right thing to do?

 

[WinoBlues]

So what do you do when an unethical replacement like this occurs ?

What do you tell your down lines to do ?

Insured doesn't have the money to pay back premiums for reinstatement.

Now what ?

Different animal.

Then I fully lay out what the other agent did to them. Spend a minute on the new policy and app to see if there is anything that could cause the policy to be rescinded (charge back for the asshole). Then I replace it myself. And instruct the person to refer all other agents and offers to me. If I get another replacement on them I let them go. They should never have been a first one.

 

[shonceman]

They can laugh all they want. I don't have to spend the next two years worrying that these folks wake up every day. I have never had a contested claim denied. I bet the first one I get will be that time I get stupid and replace a gold policy with a paper one (ain't gonna happen). I don't ever want a contested claim denied. But if I do, at least I won't have the added guilt of knowing that these folks would have been better off had they never met me.

An agent friend of mine with Mass recently told me about a client of his on whom he had written a multi-million dollar convertible term in 2015. The client replaced it in late 2019. The agent tried to save it and the client just said he "got a better deal."

Fast forward to January 2021, and the client had lost his restaurant due to Covid and was drowning in debt. Shot himself in the head. So the replacing agent gave this client a "better deal" by writing him a paper policy and causing the client to throw away his gold. Wife and three kids now financially destroyed on top of the emotional destruction of being the children of a suicide.

The client had never told his wife he replaced his policy, and when he died, the wife called the original agent. I don't know exactly how it all unfolded but he did meet with the widow and he did help file the claim though he knew the inevitable outcome and did his best to prepare her for it. He looked the replacing agent up and the replacing agent was first licensed in 2017 and his license expired unrenewed about a month after he replaced that client's gold with paper.

Recruiters recruit and train recruits to replace. Terrible way to live one's life and make a living, imo. So many in the country uninsured and under-insured, but right now we are recruiting masses of people to sell who aren't salespeople. The replacement sale is merely taking an order in most cases. The replacing agent merely exchanging one commodity, "the death benefit," with another like commodity only perhaps this one is a bit cheaper or a bit larger or even both. But they are not mere commodities and it is not replacing "more expensive and lower" with "cheaper and higher;" it is replacing gold with paper.

The real salesperson is the one who first sold that client a life insurance policy. The replacement clerks who came in behind only think themselves salespeople. And the MLM replacement clerk recruiting mills are working at peak capacity since Covid hit. It is a bull market in MLM insurance recruiting right now. And the public should be largely better off because of it. But the poor training and lack of ethical standards is causing the benefit to be smaller than it should be, and causing far more harm than should be allowed.

Here's a case I ran into yesterday. She's 77 years old. Tells me she only has high blood pressure, under control. She has LH $10k. Including FCGS, she's paying $112.90/month. I calculated LBL Preferred, $13k for $115/month.

Originally she couldn't find the policy, but told me she had only taken it out recently. But later, she remembered where she had put the policy, and got it for me. Policy date was 4/1/2020, so not quite a year old.

So, given this scenario, would you replace? Why, or why not? (I'm quoting @DayTimer here. But I would love for anybody to answer!)

 

[WinoBlues]

Here's a case I ran into yesterday. She's 77 years old. Tells me she only has high blood pressure, under control. She has LH $10k. Including FCGS, she's paying $112.90/month. I calculated LBL Preferred, $13k for $115/month.

Originally she couldn't find the policy, but told me she had only taken it out recently. But later, she remembered where she had put the policy, and got it for me. Policy date was 4/1/2020, so not quite a year old.

So, given this scenario, would you replace? Why, or why not? (I'm quoting @DayTimer here. But I would love for anybody to answer!)

Female 77
1 year old policy
New policy is 30% more coverage

I would lay out the pros and cons and let her decide.

 

[DayTimer]

So, given this scenario, would you replace? Why, or why not?

I would lay out the pros and cons and let her decide.

I would do as @WinoBlues says: I'd make sure she understood what she was paying for, and also that she would be re-starting the contestable clock. I would emphasize that with a good company like Liberty Bankers Life, so long as we are 100% honest when answering the medical and health questions that LBL will pay the claim. I could look her in the eye and tell her that I have had several contestable claims with LBL, and the company paid every single one of them. If she decided to replace, I would also have her sign my yellow legal pad where I will write:

"I would like to replace my current policy: ____yes ______no"

She checks the answer and then signs her name after her answer.

That goes in her folder in my filing cabinet, along with my notes from the appointment. I didn't always do that, but once I started writing more fully underwritten business I realized that I needed to better document what had been said. I just extended it to all appointments.

I know one guy likes to bust on me because my appointments usually take an hour or more, especially is an older couple is involved, while a "good" FE should be out in 20 minutes or less. One of the reason I am there as long as I am is I explain these things and then I ask questions to make sure the client understands what I have just explained. One of those things I take my time with is contestability and the importance of being completely truthful to protect that death benefit. "You'd agree, Ms Mary, that it really wouldn't be a smart money move for us to lie on the application to save you just $10/month at the risk of costing your family this Ten. Thousand. Dollar. Benefit, now would it?"

Here are other times I will replace if the client makes the decision to do so:

I will replace term bought for final expenses.

I will replace accidental death only (though these are usually cheap enough that the client may choose to keep it or not).

I will replace ROP term with high cash value FU whole life.

I will replace IUL's with FU whole life.

I will replace GI policies still within the ROP period.

But I have and will continue to leave over priced LH policies aged past contestability in place. And I always tell the client, "Ms. Mary, now if you ever find yourself sitting here with another insurance agent, and he or she tells you that you should replace this policy, do you know what the next words out of your mouth should be?"

When I asked that last night, the client said "I'll show him the damn door!"

And that is what they usually say when I ask that question.

One final thought, when I do replace, if there is cash value in the policy being replaced, I always try to convince the client to take reduced paid up rather than cashing it out.

I believe in life insurance. Oh yes I do.

 

[DayTimer]

Especially people who replace with CERTIFICATES and don't explain the difference

Sincere question, @Thedude: If you were explaining the difference between certificates and policies, how would you do it? Again, I'm not trying to do some sort of backhanded challenge. I sincerely would like to hear it from you and from others how this difference should be explained to our prospects.

 

[Baseball7]

For conservation you must look under your mailbox on the site on line 1 to 2 times a week as they'll have nsf letters in there .

To much work

GTL commission paid out on approval after first draft . The monthly is paid out on the 9th of the month . I'm on as earned . For conservation you must look under your mailbox on the site on line 1 to 2 times a week as they'll have nsf letters in there . This product is not for hard core final expense people who yank there money the day they get it . You must call customer service on approval and tell them to send a policy to client or they won't . Customer service answers fast. Still best product out their .

Honestly no time for something like that

 

[Baseball7]

Certificates versus policies is like the oldest debate in this crusty old site.

 

[shonceman]

Certificates versus policies is like the oldest debate in this crusty old site.

But it seems like it's usually a debate between agents. @DayTimer is asking how an agent might explain the difference to a prospect.

 

[Baseball7]

Which never comes up in real life.