TERM CONVERSION SALES TIPS AND SCRIPTS

TERM CONVERSION SALES TIPS AND SCRIPTS 05102016 TCPST Page 1

Before calling the client: Focus on the following three things: 1. Realize you re there to help the family in any way possible. 2. How can you help them find other money? 3. Be prepared (you may have some fact finding). Have the original term application in front of you along with a copy of the mailed letter. The Phone Call: When you get on the phone your introduction is very important because remember, these are orphaned clients and the insured does not know you. They re wondering, where is their original agent? (Know the original agent s name). Initial contact must be positive, de-arming and uplifting. Step 1 Phone Introduction: Overcoming Where is my Original Writing Agent Introduce yourself as the new agent of record for their insurance policy with (Company Name). Let them know that their original agent of record (State the Agent s Name) has graduated in the industry and you re very proud of that individual. This opening is vital to easing the client s concern of Oh, where s my agent? Is something going on? Step 2 Making that Connection and Setting the Appointment Really uplift that other agent and let them know our company makes sure that they have someone they can connect with first, say, I was appointed as your new qualified agent/representative and would like to give you my contact info in case you need to reach me. (Wait for the insured to get paper and something to write it down) Provide them all of your contact information including office, mobile, and email. I see you had your policy since (input year of the policy). It is time for a review. If you have not read your policy, that is ok. Most of my client s haven t read their policy either. Then just say to them, By the way, I m going to be in your area Monday and Tuesday (or whatever time you want to set up), and I want to set up a time to stop by and introduce myself. Which day is best for you? (include spouse, partner, you can check the beneficiary box on the application) 6 pm or 8 pm (Give 2 choices of time) Page 2

The Appointment Always remember to tell yourself that every one of our term clients is going to need to convert their policy someday. Why not do it now with you? Prepare yourself prior to entering the home In a folder, on one side have an application including permanent insurance brochures and brochures on carrier current term plan, a referral form and a rate sheet with some numbers calculated. On the other side of the folder, put annuity information (brochure and some form of an investment plan comparison chart) because you re there to see if you can find some money. Note: Call carrier to find original rate class for your new quotes and any other info you think you may need before the appointment. Policy number can be located on the top of the provided application. In Home Presentation Review and present their existing policy and start fact finding by discussing the following: 1. Are they still working at the same job 2. Remind them of the term period on their existing policies 3. Talk about their monthly premium 4. How much coverage they have 5. Talk about their beneficiaries 6. Go over riders (some riders will not be convertible due to age Ex. Waiver Of Premium) 7. Ask the client if they have any questions Page 3

Next step Pose this question to the client: Let me ask you this, Mr. or Mrs. ; how long do you want your policy to last? The Client will say, Until the day I die. Your response is: Ok, what you have right now might not be the tool to keep in place. I will show you what we can do to make sure your policy will last a lifetime. Is that ok with you? (Wait for the answer. It will normally be yes). Then go right into explaining that regardless of title, there are only two types of life insurance plans you can get, term or permanent. I m going to compare insurance to buying a house. You will either rent it or own it. When I am finished you will understand your choices better than most people. Explain renting as the Term Coverage. Then explain Owning as the Permanent Coverage. Ask the client: Well, which one would you prefer? The temporary plan? Or the permanent plan? If explained properly, 99.9% of the time, they will want the permanent. The Close The goal now is to get a permanent plan in place that s within their budget. Give them three options: Option 1: Full amount of the current term policy in force Option 2: 75% of that amount Option 3: 50% of that amount Converting the entire amount of term coverage to permanent coverage may be too costly and this is o.k. Simply explain that the wonderful thing about permanent coverage is that you can buy your house one room at a time. You don t have to convert the whole thing now, just what s in the budget. The rest can be done annually during subsequent policy reviews. This should provide some relief to the client that this strategy provides flexibility. Use the ACA CRM brochure (located on aclassic.com) to show the client the other areas that you are available to assist them. Page 4

SAMPLE - Orphaned Client Letter National Life Insurance Company Montpelier, Vermont Life Insurance Company of the Southwest Dallas, Texas «Mail_Date» «Owner_First_Name» «Owner_Last_Name» «Address_Line_1» «Address_Line_2» «City», «State» «Zip»-«Plus_Four» Re: Policy #: «Policy» Dear «Owner_First_Name» «Owner_Last_Name», I am writing in regards to your above referenced term insurance policy. While your policy currently provides you with excellent coverage, it is only a temporary solution to what may be a permanent need. The purpose of this letter is to outline the conversion option built into your existing policy and explain briefly some of the advantages of exercising that option now. Your policy contains a conversion provision which allows you to transfer it into any permanent policy currently offered by the National Life Group, without having to provide any evidence of insurability. As you know, over the coming years the premiums due on your term insurance policy will begin to increase. In contrast, premiums on permanent life insurance policies remain level. In addition, permanent contracts build cash values which, in later years, can be used to offset or even eliminate out of pocket premium payments.* If your need for insurance is more than just short term, the total net cost of permanent insurance over a period of years is almost always less than the total net cost of term. I would like to offer you the opportunity to have an agent assigned to review your term policy with you and to show you how converting all or a portion of it to a permanent policy may begin saving you money down the road. An agent will call you to arrange a convenient time to meet. If you desire immediate service, please feel free to call 800-708-3743, extension 205. We look forward to speaking with you. Sincerely, Gerald Policastro President American Classic Agency * Using policy values to pay premiums will reduce the cash value and death benefit. TC 38636(0208) American Classic Agency is a Managing General Agent representing the National Life Group including Life Insurance Company of the Southwest Insured, «Insured», «Policy» ONE NATIONAL LIFE DRIVE MONTPELIER, VERMONT 05604 02032010, v6 National Life Group is a trade name of National Life Insurance Company and its affiliates. Each company of the National Life Group is solely responsible for its own financial condition and contractual obligations

Active Agent Term Conversion Letter

Complete the entire Agent s Report as normal. Please pay close attention to Part 4 of Agent s Report from the LSW application where the agent s signature box is located. First Row A. Writing Agent Must Sign as the Licensed Agent B. Please Print Your Name (Licensed Agent) Legibly C. In the Percent Box, you must write in 75% D. In the Agent Number Box - write in your agent number E. In Phone Box write in your phone number Second Row A. In the Percent Box write 25% B. In the Agent Number/Suffix Box write 76609-01 You may leave all other boxes on the 2 nd row blank. Example: Part 4 Agent s Signature Signature of Licensed Agent William B Williamson Licensed Agent s Name (Print) William B. Williamson Percent 75% Signature of Additional Agent Name of Additional Agent (print) Percent 25% Agent Number/Suffix 75555 Agent Number/Suffix 76609-01 Phone Number 904-777-9311 Phone Number Delivery Instructions-- Attention Base Shop Managers and Admins Please be sure to check the agent s report, scan the application, and email to contractchange@nationallife.com. Be sure to cc: newbusinessadmin@aclassic.com Thank you! Page 5

Term Conversion Tips By Carrier Page 6

National Life Group Term Conversions Tips General: Term policies may be converted to permanent policies, without additional underwriting. Partial and Rider Conversions: Partial term conversions are allowed, as long as the remaining term policy meets minimum face amount guidelines. Other Insured and Children s Term riders may be converted, wholly or partially, as long as the remaining rider amount meets minimum requirements. The Additional Protection Benefit rider may be used with a term conversion, with normal ratios applying. No additional underwriting will be needed unless the total of the new policy base and APB exceeds the original term face amount. Conversion Period: LSW and NL term policies are convertible after 1 month, throughout the premium period, or until age 70. Conversion period will not be less than 5 years for any policy except NL ART. NL s Annual Renewable Term (ART) conversion period is 10 years. For NL term policies, there is an option of doing an issue age (original date) conversion, or attained age (current age) conversion. Original date conversions are restricted to the first 5 policy years and require a catch up premium. Original age conversions are restricted to the first 5 years and prior to the final exchange date and may only be exchanged to a whole life or limited pay life policy -- flexible premium products are excluded for original age conversions. New Policy: Policies are convertible to any NL or LSW permanent policy. Although contractually, the conversion may be limited to like policy companies (LSW term to LSW permanent) we will permit any permanent policy conversion. Underwriting and Ratings: The term conversion will be done without underwriting as long as there are no additional riders or other changes requested on the new policy. [If the new policy will have a face amount greater than the face amount of the term policy, the difference must be underwritten and requirements are based on the attained age of the insured and the increased coverage. For example: Term policy face amount is $250,000 and new policy will be for $300,000: $50,000 requires underwriting.] Upon regular conversions, the rating will remain the same as on the old policy, as long as it's available on the new policy. If the rating is not available, underwriting is asked to review the case to see what the comparable rating should be. Page 7

Premium and Credits: There is some flexibility with the premium required to be submitted. Any paid, but unearned premium for the term policy could be either refunded to the client or applied to the new policy. If it were refunded, then the client would need to pay the full new premium; if it's applied, they would pay only the difference between the applied premium and the new policy premium. For National Life term, there may be a conversion credit available. A term conversion credit of 1% per completed term contract month will be earned up to a maximum of 12% (12 months). To receive this credit, the client must convert from term to permanent insurance within ten years of the term issue date. The credit is applied as a discount to the permanent policy s first year premium. (See below) Converting an NL term to an NL or LSW UL/Whole Life: The conversion credit is 12% of the CTP if the term policy is converted on or after the 1st policy anniversary. If the term policy converted prior to the 1st policy anniversary the term conversion credit is 1% for each month the term policy is in-force as of the issue date of the new policy. The term conversion credit is applied to the new policy as a premium payment with no commissions paid on this amount. If NL term is converted to a Traditional Whole Life policy the term conversion is 12% of the base annual premium if the term policy is converted on or after the 1st policy anniversary. If the term policy converted prior to the 1st policy anniversary the term conversion credit is 1% for each month the term policy is inforce as of the issue date of the new policy. The term credit is used to reduce the amount of the initial premium and no commissions are paid on the amount of the term conversion credit. The result to the client is that they have a lesser amount to pay for the initial premium or can choose to pay the whole premium and the term conversion credit is used to boost the gross payments. We do not offer the term conversion credit when LSW Term is converted to NL or LSW UL/Whole life. Contestability: When a term policy is converted, the contestability of the new policy is measured from the issue date of the term policy, unless additional riders are requested for the policies that require underwriting. In that case contestability will be measured from the issue date of the new policy. Commissions, Persistency, etc: Conversions do not affect persistency. No commissions are paid on the NL term conversion credit. Commissions are paid on the new policy. If you convert a LSW term to a LSW UL, then the agent will get full commission. If you convert NL term to LSW UL, a term credit maybe applied to the policy (see above) and that reduces the CTP by the credit on the policy. That, in turn, will reduce agent s commissions because he will be paid on that CTP or PPP whichever is less in the first year. Year 1 Chargeback s: If a term policy is in year 1 and premiums were annualized, the unearned portion of the annualized commission is charged back. If the commissions are not annualized and we refund the unearned premium, commissions are charged back for that portion of the refunded premium. If the policy is paid to date and no annualization of commissions, then no chargeback takes place. Beyond Year 1 Chargeback s: Renewal commissions are charged back based on the term policy for any unearned premium that is refunded. Page 8

Application: Form 20007 - Part A-K are the areas that need to be completed on the application. The Agent s Report (form 1441G) must be completed with the commission split. Interest Crediting Strategies (if converting to IUL). If they are not converting the complete amount of the policy indicate the amount they are converting. Additional Coverage or Adding ABRS: If the client wants to convert to an amount greater than the existing face amount the application form 20007 and 20114 will need to be completed. Medical requirements may be required such as an Oral Fluid or ParaMed due to their age. (ex. over $250,000) Additional Information on the Policy Holder: To obtain additional information on a policy holder contact your BaseShop dedicated Contract Change Representative. ABR Riders: Terminal Illness ABR There will be no change to our current practice of adding the Terminal Illness ABR without underwriting evidence. Chronic and Critical Illness ABR The following will be required for term conversions and when adding Chronic and/or Critical Illness Accelerated Benefit rider(s) after issue to any National Life or LSW policy: HIPAA Authorization Form ABR Disclosure For LSW policies: Form 20007, Complete: Part A K, Form 20114, ABR Disclosure Statements and HIPAA Forms. Once the paperwork is completed, Contract Change will refer these cases to underwriting for approval. The only underwriting is on the Chronic and Critical Illness ABR and a MIB will be conducted and the ABR will be an accept or reject. Page 9