To Surrender Form or Not

[WinoBlues]

I always send in surrender forms. I am to old to have to learn a new career.

However, more and more I am running into agents that have not sent one in They let the old policies APL or just lapse. I fully get why they do not. But it is starting to piss me off. If I have to do things correctly, they should. I just ran into another where the agent let a policy APL till it RdPu. They should have RdPu it themselves earlier or surrendered it. Both would have put the client in a better place.

Now, what do I do about it? Call the replacing company? Feels kinda whinny, But if I do nothing they continue. Rat him out to the client and walk away?

 

[Josh]

However, more and more I am running into agents that have not sent one in They let the old policies APL or just lapse. I fully get why they do not. But it is starting to piss me off. If I have to do things correctly, they should. I just ran into another where the agent let a policy APL till it RdPu. They should have RdPu it themselves earlier or surrendered it. Both would have put the client in a better place.

Devil's advocate, what if there was a claim between the RdPu and when the APL would have kept it alive? I'm assuming we're talking about reduced paid-up and automatic premium loan vs surrender, but if the premium loan is keeping the policy alive longer than the insured is, then the death benefit (ok, maybe I should have said DB) would have been higher and the beneficiaries would be happier, no? Certainly the DB would be higher than the face amount and in the same scenario cashing out a life policy and then a few months later having a claim happen wouldn't be a great situation.

Thoughts?

 

[WinoBlues]

Devil's advocate, what if there was a claim between the RdPu and when the APL would have kept it alive? I'm assuming we're talking about reduced paid-up and automatic premium loan vs surrender, but if the premium loan is keeping the policy alive longer than the insured is, then the death benefit (ok, maybe I should have said DB) would have been higher and the beneficiaries would be happier, no? Certainly the DB would be higher than the face amount and in the same scenario cashing out a life policy and then a few months later having a claim happen wouldn't be a great situation.

Thoughts?

I agree with what you are saying and have done that with extended term and rdpu. However the client knew what I was doing. In this case the agent did not go over the options. It apl'd till it did not have enough to pay a semi annual then RdPu'd.

The bigger issue is him not sending in the replacement forms. These are orphans I work, so it does not hurt me personally. In fact I used it against him with the owner/daughter. I will probably replace him now. I will use a replacement form. May hold it a day or so though.

I am not big on rules, but if I have to go by them everyone should. I guess I am just being a whinny little beeach.

 

[VolAgent]

Surrender is one thing, replacement is a completely different issue. There is no excuse for not submitting the replacement forms.

 

[WinoBlues]

Surrender is one thing, replacement is a completely different issue. There is no excuse for not submitting the replacement forms.

You are correct. I misspoke (typed) I meant to say Replacement form. I know why he did not.

 

[Norwayguy]

They are trying to get around Replacement rules by saying they are "Not Surrendering/Replacing the policy" We all know they are lieing.

I'm not sure what you should do....You can call and create a big storm and then a regulating body might come out with some more forms for us to fill out and those agents will still willfully ignore the replacement forms.


I actually got into a pissing match with an underwriter recently. The app required I list all policies including those lapsed within the last 13 months. Which I gladly did. The policy that lapsed had been lapsed for 7 months prior to me meeting with this client. I filled out the replacement forms as not replacing the policy based on the wording of the questions.

What drove me nutz is the Underwriter saying it was an NAIC requirement instead of a company requirement. NAIC is nothing my states insurance commission is something. I placed the call and there is no place in Maine Law that states a length of time regarding lapses...Matter of fact what Maine is more insterested in mandating the exact replacement form that the carrier used with the wording exactly like it said which for anyone who reads english.

I wouldn't have had a problem if the underwriter had said. This is a company requirement and I agree with you that based on what the question says you filled the app and replacement for out correctly but our company policy requires "x" and I would have said no problem and I would have gotten the initials gladly...Don't say its a requirement of 1 thing when its not.

 

[VolAgent]

You are correct. I misspoke (typed) I meant to say Replacement form. I know why he did not.

The funny thing is, there is no one to conserve the business. I don't do a ton of replacements, but in all the ones I did, they never heard from an agent or the home office. At least, it never was mentioned and my business stayed on the books.

The only other thing I can think of is that the replacing company is sitting on the replacement forms. But, that is their problem, not mine.

 

[Josh]

You are correct. I misspoke (typed) I meant to say Replacement form. I know why he did not.

Oh, now I get it. That's a horse of a very different colour.

 

[rousemark]

I always send in surrender forms. I am to old to have to learn a new career.

However, more and more I am running into agents that have not sent one in They let the old policies APL or just lapse. I fully get why they do not. But it is starting to piss me off. If I have to do things correctly, they should. I just ran into another where the agent let a policy APL till it RdPu. They should have RdPu it themselves earlier or surrendered it. Both would have put the client in a better place.

Now, what do I do about it? Call the replacing company? Feels kinda whinny, But if I do nothing they continue. Rat him out to the client and walk away?

It will do little good for you to complain to anyone.. The replacing company wants the business and the DOIs generally don't get involved in disputes "between agents". However, the DOIs do take consumer complaints seriously so if you can get the insured to write out a complaint the agent may feel enough heat to straighten up.

 

[TDK]

I believe the legal definition of a replacement is "the client stops paying premiums on a policy to purchase another." So those who think by APLing it they are not replacing it are wrong and would be subject to DOI penalties. But is it worth the effort to go after them?