Reduced Paid up option

[freshfishy]

Hi all,

I've never done one of these, but wanted to reach out to the experts and make sure I understand this correctly.

From a client standpoint, is there any more that needs to be done aside from requesting this done by the insurer by calling in or requesting them to send a form to the insured in writing? Are there any other steps I'm missing or need to learn about?

From my understanding this seems to be an excellent way to add coverage for people who can't necessarily afford more but may have some locked in value in a older policy, or reduce their payment on what they already have.

I feel like I am missing something as this seems to simple and if I'm understanding correctly an excellent means to get sales otherwise not possible. If it is this simple, why do I not see this discussed much?

Thanks in advance.

 

[VolAgent]

Its not that hard. Typically there is a form the company wants filled out. Have the client fill it out, sign it and send it in. Then it is locked in for life at the reduced coverage amount.

 

[HoosierLife]

Here's an article I wrote on the topic:

https://www.linkedin.com/pulse/using-reduced-paid-up-increase-your-final-expense-sales-joshua-jones/

 

[Birdman300]

Just be sure to contact the carrier to verify the current RPU value. Policy loans will reduce the RPU, and you'd be surprised how often your client will forget to tell you about that loan she took out last month. It's not always a great fit, but in the right situation it can be great for them...and you.

 

[freshfishy]

Thanks guys for the tips and fantastic write up HoosierLife. Thanks!

 

[OttoGraf]

You are right on @freshfishy !!!

It's another great tool to have in your tool belt. Especially in cases where they have an older policy but need more coverage.

They can take the reduced paid up option and put that monthly premium towards a new policy and now have the extra coverage they need. All without adding any extra money out of pocket to their monthly budget.