Planned term conversion

[schealthagent]

Are there cases in which it would make sense for someone (at 50 yo) to purchase term with the intent of converting down the road. For instance, if someone is definitely going to need life insurance for estate preservation (home alone is valued at 7 mil and almost paid off), but would rather be putting the premium money to use themselves in the mean time because they have a proven track record of making money even in tough times?

If not, how would you explain it to them?

If so, how can you tell what options will be available with which term policies? Are there any that have better conversion options?

Thanks!

 

[bobson]

Are there cases in which it would make sense for someone (at 50 yo) to purchase term with the intent of converting down the road. For instance, if someone is definitely going to need life insurance for estate preservation (home alone is valued at 7 mil and almost paid off), but would rather be putting the premium money to use themselves in the mean time because they have a proven track record of making money even in tough times?

If not, how would you explain it to them?

If so, how can you tell what options will be available with which term policies? Are there any that have better conversion options?

Thanks!

Yes, I sell all my term policies with the idea of conversion down the road. The sooner he converts the cheaper it is. Sell a policy from a mutual insurance company or a mutual holding company.

But without any particulars (other than the home's value) a case that size you need a veteran agent, probably someone with a CLU to help out. 25% of a commission of a premium that size with 25% of the commission on conversions is a whole lot better than 100% of zero. Zero is what you'll get if you try to handle this alone. Maybe you could get some home office help though and get a larger percentage.

 

[moonlightandmargaritas]

Maybe you could get some home office help

An oxymoron if I ever saw one.

 

[fjman]

After spending some time with guardian, I like their term product when conversion is expected, although its not the lowest premium. It converts to a whole life policy even if the insured is on Waiver of Premium. WL premiums would still be waived after the conversion (I think its limited to $2M of coverage but can't remember).

Transamerica has some nice ROP UL products with enhanced early cash values designed for PF over a longer financed term. Might be road to go down???? Sounds like this client has a lot of wealth....