Paid Up Policy? Killin' My Deals?

[5pill]

What does it mean when you are pitching final expense to a customer and they say they already have a paid up policy? I have seen 5, 10, and 20 year pay life policies, but what does that really mean? How do I combat the objection?

 

[senior-advisor-indiana]

Look at the cash value in the policy and see if you can roll it into a single premium life to increase the face amount or just add more coverage if they need it.

 

[Mega producer]

What does it mean when you are pitching final expense to a customer and they say they already have a paid up policy? I have seen 5, 10, and 20 year pay life policies, but what does that really mean? How do I combat the objection?

The probably opted for a reduced face amount to have the policy paid up.

 

[Newby]

What does it mean when you are pitching final expense to a customer and they say they already have a paid up policy? I have seen 5, 10, and 20 year pay life policies, but what does that really mean? How do I combat the objection?

A paid up policy is when they take a limited pay plan (5-year, 10-year, 20-year pay) whole life and they have paid it off. They are now covered for life but have no further premiums due.

A LOT of them that you run into with final expense are people who prepaid their funerals through a funeral home. In those cases they will ALWAYS have a paid up policy once they have had it a few years. Many are single pay which is paid up from day one. They also have inflation protection built into these policies so the death benefit INCREASES each year automatically similar to a GOOD LTC policy.

The thing you have to understand with people like this is that they BELIEVE in planning ahead and being protected. They usually DON'T believe in a lifetime of payments.

All YOU have to do to make sales off these leads is discover if they want additional coverage over and above the funeral for themselves OR kids, grandkids etc.

When you quote them, quote the 10-pay and 20-pay premiums as well as lifetime. If your company doesn't offer anything except lifetime pay you should flush them and get with a better company.

You also need to get some free training from your upline as does Mega Producer.

 

[Norwayguy]

What does it mean when you are pitching final expense to a customer and they say they already have a paid up policy? I have seen 5, 10, and 20 year pay life policies, but what does that really mean? How do I combat the objection?

As others have already mentioned they may have limited pay policies that are paid up...However most of the time when a client tells me that their policy is paid up or will be paid up in a year or so you might want to dig deeper most of the time I find they have been sold a lifetime pay WL or UL policy and the agent told them after so many years the policy would be paid up which is not the case he is assuming interest and/or dividends would be enough each year to keep the policy in force. i have found many times on ULs they were told this and the agent used current rates and that the policies are rapidly headed towards an implosion. If this is a WL lifetime pay policy and guaranteed interest now pays the premium the policy is not paid up in the client does a withdrawal of cash value then the interest decreases and premiums will start eating away at cash value and may cause the policy to lapse...Offer to review the policy form them if interest is paying the premiums just make sure they realize a withdrawal of CV will affect interest and the policy is not truely paid up.

 

[Mega producer]

A paid up policy is when they take a limited pay plan (5-year, 10-year, 20-year pay) whole life and they have paid it off. They are now covered for life but have no further premiums due.

A LOT of them that you run into with final expense are people who prepaid their funerals through a funeral home. In those cases they will ALWAYS have a paid up policy once they have had it a few years. Many are single pay which is paid up from day one. They also have inflation protection built into these policies so the death benefit INCREASES each year automatically similar to a GOOD LTC policy.

The thing you have to understand with people like this is that they BELIEVE in planning ahead and being protected. They usually DON'T believe in a lifetime of payments.

All YOU have to do to make sales off these leads is discover if they want additional coverage over and above the funeral for themselves OR kids, grandkids etc.

When you quote them, quote the 10-pay and 20-pay premiums as well as lifetime. If your company doesn't offer anything except lifetime pay you should flush them and get with a better company.

You also need to get some free training from your upline as does Mega Producer.

5Pill, my advise is to take a look at the policy. Just because it is paid up doesn't necessarily mean it was bought as a limited pay plan ( 5-year, 10-year, 20-year pay) whole life. It is possible that they bought the policy as a lifetime pay, and at some point decided to lapse the policy and have it processed to a reduced paid-up nonforfeiture option where no further premiums are paid, based on the cash value.
Most lifetime pay whole life illustration will have a paid up column

Knowing how their current policy got to be paid up will certainly help, in terms of what to present, if they do need additional coverage.

 

[Newby]

As others have already mentioned they may have limited pay policies that are paid up...However most of the time when a client tells me that their policy is paid up or will be paid up in a year or so you might want to dig deeper most of the time I find they have been sold a lifetime pay WL or UL policy and the agent told them after so many years the policy would be paid up which is not the case he is assuming interest and/or dividends would be enough each year to keep the policy in force. i have found many times on ULs they were told this and the agent used current rates and that the policies are rapidly headed towards an implosion. If this is a WL lifetime pay policy and guaranteed interest now pays the premium the policy is not paid up in the client does a withdrawal of cash value then the interest decreases and premiums will start eating away at cash value and may cause the policy to lapse...Offer to review the policy form them if interest is paying the premiums just make sure they realize a withdrawal of CV will affect interest and the policy is not truely paid up.

Very true! And at first they NEVER believe you when you first tell them what you suspect. But once you show them the PROOF you are their new best friend.

Usually the company name will tell you what you need to know. If they tell you they have a paid up policy with Prudential, MetLife, Lincoln Life, or any of the big mutuals (or former mutuals) you find people who think that the policy is paid up when actually the dividends are making all or some of the payment and it is not actually paid up at all. Many of these policies lapse in their later years if they don't watch their cash values closely.

If the company name is Forethought, Homesteaders, Monumental, Lincoln Heritage, Great Western, American Memorial, Investors Heritage, NGL, FDLIC, Atlantic Coast, Cincinnati Equitable, etc. then it likely IS a real paid up policy. I would estimate that 25% of all seniors who are middle class or above really DO own a real live paid up policy from one of these companies. It's not rare at all.