Replacement Question

[WinoBlues]

About a year ago, I sold a guy a TA simplified policy with a $40000 face amount. He recently called me to tell me that someone had told him that they could get him about 25% more coverage with a fully underwritten policy for the same premium. At the time I sold him the policy I didn't have a good fully underwritten company that I could put him with. I do now and could place him with them (he will go with me if I can match the other guy's offer). Would it cause me problems if I replace a policy that I have written? Or should I let the other guy replace it and avoid any possible problems? He takes no meds and has no health issues and would fly with anybody. And comments would be appreciated.

Like everyone else said probably not a problem for you unless they think you are rolling your book.

Devil's advocate - if I am the replacing agent I already told them you took the lazy way out that paid the most doing an FE instead of a standard policy with full guarantees. If you come back with a low or non rated company or a Fraternal I going to compare value over price. On a $40,000 policy probably not that much difference away. Also banding probably lowered the cost per thousand any way over $50,000.

Also be aware if you are competing with a GUL the death benefit is going to be much higher than a FE and with a terminal illness rider.

 

[Sundown]

"If it improves the client's situation I write the business. Doesn't matter what company they have or who wrote it."



JD-

What are your thoughts on the client re-entering the contestability period if you replace one of your own policies, and is there a rule-of-thumb benefit analysis that you use? I mean, a percentage decrease in premium, or increase in benefit, etc.

 

[MYOWNCO]

Like everyone else said probably not a problem for you unless they think you are rolling your book.

Devil's advocate - if I am the replacing agent I already told them you took the lazy way out that paid the most doing an FE instead of a standard policy with full guarantees. If you come back with a low or non rated company or a Fraternal I going to compare value over price. On a $40,000 policy probably not that much difference away. Also banding probably lowered the cost per thousand any way over $50,000.

Also be aware if you are competing with a GUL the death benefit is going to be much higher than a FE and with a terminal illness rider.

Speaking to this thread and replacing FE with fully underwritten (or a standard from the get go), which carriers have strong programs for this? Perhaps we need a cheat sheet for this...
Thanks

 

[Newby]

"If it improves the client's situation I write the business. Doesn't matter what company they have or who wrote it." JD- What are your thoughts on the client re-entering the contestability period if you replace one of your own policies, and is there a rule-of-thumb benefit analysis that you use? I mean, a percentage decrease in premium, or increase in benefit, etc.

JD is in KY. No contestibility there when you replace.

 

[jdeasy]

"If it improves the client's situation I write the business. Doesn't matter what company they have or who wrote it."



JD-

What are your thoughts on the client re-entering the contestability period if you replace one of your own policies, and is there a rule-of-thumb benefit analysis that you use? I mean, a percentage decrease in premium, or increase in benefit, etc.

That is always part of the consideration. But, contestabiliy is only a problem in the case of a person being dishoest. No dishonesty, no problem.

 

[MrBigD117]

Like everyone else said probably not a problem for you unless they think you are rolling your book. Devil's advocate - if I am the replacing agent I already told them you took the lazy way out that paid the most doing an FE instead of a standard policy with full guarantees. If you come back with a low or non rated company or a Fraternal I going to compare value over price. On a $40,000 policy probably not that much difference away. Also banding probably lowered the cost per thousand any way over $50,000. Also be aware if you are competing with a GUL the death benefit is going to be much higher than a FE and with a terminal illness rider.

I hear what you are saying. When I met with him, I saved him from a UL that was about to implode. I helped him get about $10000 back, when a short time later he would have had to up his monthly premiums considerably to keep his policy in force. So, he is very loyal,to me. At the time, I had no better option to offer him, and now I have a much better knowledge of what to offer him. Now, I have both.

 

[WinoBlues]

I hear what you are saying. When I met with him, I saved him from a UL that was about to implode. I helped him get about $10000 back, when a short time later he would have had to up his monthly premiums considerably to keep his policy in force. So, he is very loyal,to me. At the time, I had no better option to offer him, and now I have a much better knowledge of what to offer him. Now, I have both.

Then like everyone else said replace it. Not that much different that replacing the UL. You are putting him in a better place. Another benefit for himhe keeps an agent that he trust. Win win.