Life insurance policy review can generate leads

Potential clients often lurk in plain sight. You don’t need to cold call, host a seminar or ask for referrals to find them. You already know them; you just need to look beyond your current relationship and think about that individual’s potential life insurance needs.

Think about someone you know fairly well who isn’t a current client. Your personal trainer. Someone who works in your building. The owner of the restaurant that you have lunch at twice a week. The people who provide you medical, dental and chiropractic care.

Asking prospects how long it’s been since they have received a life insurance policy review is a great way to start a conversation. If it’s been a while or if the client can’t remember, most likely a portion of the policy or beneficiaries is out of date.

The key is, you have to ask. If you don’t offer to do a life insurance policy review for an acquaintance, I guarantee another producer will.

So much has changed in the life insurance business in the last 20 years that there are abundant opportunities to earn new clients and their business by offering to conduct a complementary life insurance policy review and possibly update an existing policy.

For example, variable universal life (VUL) policies may have lost a portion of their cash values because of severe market downturns in the last 15 years. Regular universal life policies might be generating less interest than originally illustrated, meaning they may be on the verge of lapsing if policyholders failed to adjust their premium payments.

The key is, you have to ask. If you don’t offer to do a life insurance policy review for an acquaintance, I guarantee another producer will.

Case in point: a CreativeOne producer found a new client just by offering to review the life insurance policies of his office’s property manager.

The property manager had a multi-million-dollar portfolio of real estate, but no immediate family to take it over after his death. So he planned to equally divide his estate among his six siblings. To provide liquidity needed to cover estate taxes and other potential costs, the prospect was paying premiums on a $5 million VUL policy. His siblings co-owned the policy to keep it out of his estate, and they were also the beneficiaries.

At this stage, the prospect expected to be done paying premiums and have coverage the rest of his life. But the producer who sold him that policy informed him each month that he needed to make “one more payment,” to the tune of $120,000 a year.

The producer convinced the property manager to let him review his existing policies. The producer sent the paperwork to the CreativeOne life team. We could tell the variable policy was going to require premium payments for quite awhile, even if it didn’t lose a significant part of its cash value like it did during the 2008 market decline.

We discovered two more facts about the case that made it a prime candidate for replacement. First, the policy was originally written to provide estate liquidity. However, it was issued at a time when the minimum exclusion amount subject to tax was lower, and the estate tax rate was much higher. Basically, this client didn’t need as much insurance to cover estate taxes because his estate wouuld not require as much as it would have had he died 15 years ago. Second, the policy’s cash surrender value was large enough to make a single premium payment on a guaranteed UL policy, especially now that his insurance needs were not as great.

Once the client saw the numbers, he was convinced. We helped the producer set up a 1035 exchange, using the cash surrender value of his existing policy. The property manager now has guaranteed death benefit through age 105 without having to pay additional out-of-pocket premium.

What’s more, our knowledge and relationships of carriers helped us direct the case to Lincoln Financial Group. The carrier initially rated the property manager a Table 3, but shaved the rating down to standard. Plus, instead of owning a variable life policy that moved up and down with the stock market, his new guaranteed universal life policy is not subject to market movements.

Our close relationship with Lincoln also helped the client and producer through a potentially onerous situation.

The original policy was owned by six siblings. Because the new policy was being funded through a 1035 exchange, the policy ownership had to remain the same. That meant all six siblings had to sign the same stack of copious forms. This was problematic because all six lived in different areas, including one temporarily residing in the Philippines. The normal option would be to obtain the forms one-by-one, either by faxing or shipping them to all six locations. Neither option was ideal because of the time involved and the risk of losing paperwork along the way.

CreativeOne brainstormed with Lincoln’s New Business and Underwriting teams and discovered a solution. Rather than have one set of forms with six signatures, Lincoln agreed to accept multiple sets of those forms. All six signatures were obtained, just not on the same set of paperwork.

Because of the in-depth policy review conducted by CreativeOne and our carrier relationship, the client received an updated policy with no out-of-pocket premium paid and the producer earned a commission on an $80,000 target premium and $1.5 million in excess premium.

Enlist CreativeOne to help you uncover these types of opportunities. We can assist you in conducting a life insurance policy review of clients or prospects to determine if it still meets their needs. Plus, we can handle all the detail work of the 1035 exchange, finding the right carrier and getting the paperwork together.

For more information, contact your CreativeOne life sales team at 800.992.2642.


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