Converting a Policy to Keep a Client Covered

How I worked to meet a client's changing life insurance needs

By Jeff Iwashita (Licensed Agent)

In May of 2009, a client's husband called in to Matrix Direct because her Transamerica policy was coming up on its term and the premiums were going to go up to $778 per quarter. We went through a few basic health questions only to find out the client had been diagnosed with cancer two years earlier.

Unfortunately, reapplying for a new 10-year term was not an option for this client, so I advised the husband that the term policy might be convertible to a universal life policy. I double-checked with my manager Steve to see if the current policy was convertible then we called Transamerica and confirmed that it was.

I reviewed the client's coverage needs and we determined that if something were to happen to her, the family would only need about $50,000 of coverage. Unfortunately, they could not afford guaranteeing the policy until she was 110 years old, but they could afford to covert the policy to $50,000 universal life coverage with the rate guaranteed for at least 10 years.

We exercised the conversion option for the term policy, which meant the client's premiums would be guaranteed at $471 per quarter for at least 10 years.  The client and her husband were happy that they could keep life insurance coverage for her and that the process for the conversion was so easy, without requiring a new medical exam or application.

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