Term or permanent life insurance: which is right?
It may be helpful to review these points when suggesting a conversion from term life insurance to permanent life insurance. Simply follow the easy conversion instructions. Term Life Insurance vs. Permanent Life Insurance Most people purchase term life insurance to protect their family from the loss of the breadwinner. The low initial premiums make it affordable while the high death benefit fills the protection need. Because most term insurance premiums rise with age, this type of policy often becomes excessively expensive and no longer serves your client’s needs. Reasons to convert: • Term premiums increase each year. • The end of the level premium period is approaching. • A life-long, permanent coverage need emerges. • Cash accumulation/retirement need develops. With permanent insurance: • Flexible premiums available for life of the policy. • Coverage is available to ages as high as 120. • Client can use the policy’s cash value to help supplement retirement, college expenses and other future cash needs through policy loans and/or withdrawals. Conversion Features Most term policies include a conversion privilege feature, which provides the opportunity to convert to a permanent policy by a certain date. In addition, some term policies offer a conversion credit that makes converting even more economical. A conversion credit is an amount put into your client’s new permanent policy based on the premium of the term policy. One advantage of converting to permanent life insurance instead of purchasing a new permanent policy is there is no need for medical or financial requalification. This may only hold true if coverage amounts remain the same. If coverage is increased, there may be a need to provide additional medical and financial information. When to convert: • End date for conversion is typically an attained age or policy duration. • Consult your client’s term contract for details or call 800-572-2467, ext. 8459 or 8701 Kansas City Life Reissue Department for answers to questions. Completing the Sale • Does the client have new needs for increased coverage? • Does the client have new needs for additional riders? Events such as these lead to new sales and increased commissions.
Steps for a Conversion
• For a straight conversion, complete the attached A134. Attached form not available for use in Connecticut.
• For additional coverage, complete full A134, available from Supply, ext. 8247 or supply@kclife.com.
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