Life Insurance Surrender Form

[liorselamb]

Untangle your panties and take a breath. If you believe I misunderstood you, either ignore my ignorance or tell me where I went off track rather than telling me my post is pointless. Perhaps we work a different demographic / market but I have no problem - I even remind my replacement cases that they have every right to get both sides of the replacement issue. I even give them my own "Replacement Disclosure" that covers the replacement considerations from pretty much every angle. It sounds like you're trying to insulate your customer from their existing company. Is that not accurate? I am repeatedly surprised by how the existing company's or agent's effort (or lack of effort) to salvage their business makes me look. If you disagree with me, rather than calling my efforts to share "pointless", treat my opinion as an item on the grocery shelf. If you can use, put it in your basket. If not, leave it on the shelf.

My point wasn't to put you down in any way. You've replied to a thread without reading my post. That's all. If you'd read it first you'll see what I meant.

The only reason I "collect" the surrender forms is to streamline the process and therefor save time. There are carriers out there that are overpriced and I come across some of them often.

Every replacement has to be in the client's best interest of course, but again, this is only for time saving goal. I didn't mean to offend you at all

 

[Larry Tew]

My point wasn't to put you down in any way. You've replied to a thread without reading my post. That's all. If you'd read it first you'll see what I meant.

The only reason I "collect" the surrender forms is to streamline the process and therefor save time. There are carriers out there that are overpriced and I come across some of them often.

Every replacement has to be in the client's best interest of course, but again, this is only for time saving goal. I didn't mean to offend you at all

I'm not offended, and I appreciate that you even care if I was. I too wasn't aiming to offend.

 

[moonlightandmargaritas]

I'm not offended, and I appreciate that you even care if I was. I too wasn't aiming to offend.

Let's all join hands and sing Kumbaya!

 

[liorselamb]

Let's all join hands and sing Kumbaya!

Lmao.........................

 

[Larry Tew]

Let's all join hands and sing Kumbaya!

Yeah, it seems like such a waste to let a perfectly good opportunity to be offensive pass by.

 

[meclimit]

Gentlemen, help me understand something here. If an overpriced policy is surrendered, then the client not only takes this hit on the policy but also loses the cost basis.

If the existing policy is exchanged for a new policy, then the cost basis is carried over. I would opt to preserve the cost basis whenever possible. At some point in the future, it might make sense for the client to surrender to basis rather than immediately taking policy loans in order to access the cash value.

 

[Larry Tew]

Gentlemen, help me understand something here. If an overpriced policy is surrendered, then the client not only takes this hit on the policy but also loses the cost basis.

If the existing policy is exchanged for a new policy, then the cost basis is carried over. I would opt to preserve the cost basis whenever possible. At some point in the future, it might make sense for the client to surrender to basis rather than immediately taking policy loans in order to access the cash value.

That's a good point. 1035'ing a policy with a gain is a no-brainer but I'll bet many if not most agents don't bother with a 1035 exchange just to preserve the cost basis of the old contract when there's no gain.

More exchanges would be done if the process weren't so torturous.

 

[VolAgent]

That's a good point. 1035'ing a policy with a gain is a no-brainer but I'll bet many if not most agents don't bother with a 1035 exchange just to preserve the cost basis of the old contract when there's no gain.

More exchanges would be done if the process weren't so torturous.

I would wager that most of the time when a replacement is done where there was no gain, it was done to save the death benefit. It wasn't done with consideration of taking income from the policy in the future. Think of all the imploding ULs that are replaced. They aren't replacing it because the performance wasn't there to fund their retirement. They are replacing so they will still have a policy that pays a death benefit.

 

[DDG]

Regarding the original point - building up a supply of forms (any kind) to aid in the sales process is a good idea. However, you need to make sure you are always using the current form. Otherwise, carriers can reject the one you used as outdated, forcing you to have to go back to the client to get a new form signed.

We always check with the carrier involved to make sure we are using the correct form.

Also, just to be clear, 1035 to keep the cost basis is never a bad thing, if possible. You never know when their needs may change and wasting that basis could hurt them.

Now, if you're doing the old "A.L. Williams" gig of replacing permanent coverage with term insurance, I can see how that is not possible.