Turning Lemons into Lemonade

Life Insurance Case Study: Always Review The Conversion Option. A retired military officer, age 65, approached us to help him write a new life insurance policy.  As always, we began a needs analysis to help him understand the situation.  What we uncovered was a very confused client who had been misinformed.  Luckily, it wasn’t too late to help him.

His life insurance portfolio consisted of a $100,000 Protective Life term policy, a smaller policy that he had forgotten about, and an application for a new final expense policy.  The client was applying for the final expense policy because the Protective Life policy was now past the guarantee period, and the annual renewal term (ART) period obligated him to increasing premiums each year.  These premiums were already getting too expensive for him, at about $3,000 a year.  Unfortunately, the projections we obtained showed that these premiums would double in the next 4 years under the ART plan.


As part of our process, we evaluated the opportunity to convert this policy.  The client had no awareness of the term conversion option, but was ecstatic to learn that he was able to convert this term policy into a new Universal Life policy, with level premiums guaranteed to age 100.  The icing on the cake: the Universal Life premiums are actually less expensive then the Term premiums.  So, the client could spend less money, get a better policy that builds cash value, and avoid unnecessary underwriting.  We immediately canceled the final expense application, lapsed the smaller policy, and issued the converted Universal Life policy.  The client could not be happier.


“In the future, we will know who to contact.  Thank you for all your help and patience in this regard. We will recommend you to anyone who needs insurance or annuity information. I hope that the the hospital people will offer a time slot to you at one of our conferences; you would offer a great service to many.”

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