Or a slap in the face? Maybe both in this case. Despite the fact that I devote most of my attention in these weekly postings to "advanced markets" topics, the truth of the matter is that I also work on an awful lot of bread and butter transactions. You know, the ones that keep the doors open and pay the bills so that we have the ability to work on some of the more challenging cases that provide the larger pay days. Today's post is about one of those smaller sales, and the opportunity to stand out from the crowd a bit.

Before we get there though, let's talk about the kick in the butt! As in a little incentive for your clients to take action. If you have sold any term insurance with West Coast Life or Protective Life in the last few years, you have an opportunity to convert some of those contracts to permanent coverage. How is that news? It's all in the product you can convert to!

Protective, like many other carriers these days, normally limits conversions to one of their currently available permanent products. Why? Profitability of course. Allowing a term policy holder to convert to the lowest margin products is not nearly as good for the bottom line as requiring them to use one that makes the carrier a bit more cash. In this case, the normal conversion product is actually still quite good, so I don't have any issues with the carrier.

Right now, however, if your client's Protective policy is dated January 1, 2008 or later, you can convert to an expanded list of permanent options from Protective. Clients who take advantage of this opportunity will be able to lock in some great pricing, and the producer will be able to earn a nice pay day at the same time. You can read the  pertinent details here.

So if that is the kick in the butt, what is the slap in the face? Easy, imagine discovering that you only have one product to convert to, and that product is an absolute dog! If you take a look at the actual contract language in a term policy, conversion rights are limited to "a currently available permanent product". It says nothing's about the type or quality of the product, and learning this the hard way can be, well, a bit like a slap in the face.

How can you avoid this?   Know your carriers. Know their policies. While there is no guarantee that the carrier will not change their rules between policy issue and that eventual conversion, if the carrier already restricts the client's options, perhaps it is time to pay a few dollars more per month and give our clients a fighting chance at more options in the future. As with many of the topics discussed here, it's just good planning, and it avoids the "pick the cheapest carrier on the spreadsheet" trap.