What Percentage of Your Business is Replacements?

[jacobtn]

Just curious what percentage of apps guys are sending in are replacements of other life policies, ULs, or just plain crappy FE products. if you come across someone who has a $5k FE, and needs another 5k or so, do you look at replacing it, or just sell another 5k?

Just curious what everyone does here.

 

[Fisher]

Surprised at the question actually. Seems like Jacob has been around a bit and would know that there is no 'what everyone does' answer.

Me, I do whatever makes sense for the client. Pretty simple.

 

[Rearden]

10%, maybe 15% -- I don't feel comfortable replacing a client's coverage unless they want to because they have a problem with it being term, UL, or overpriced FE AND they're out of contestability and they may have some health issues.

 

[jdeasy]

Just curious what percentage of apps guys are sending in are replacements of other life policies, ULs, or just plain crappy FE products. if you come across someone who has a $5k FE, and needs another 5k or so, do you look at replacing it, or just sell another 5k?

Just curious what everyone does here.

I would estimate that 30 to 40% of my business is replacement. In the case you mentioned of them having $5K and want more I will always look first to replace it.

I replaced one this week for the exact same price she was paying. She bought a CL 4 years ago and now I could get her the exact same coverage for the almost the exact price. it was 6 cents a month higher, but she had $500 CV in the CL policy that she gets now. As you know, $500 is world of money for he FE market.

It's rare that I don't replace in that situation of adding coverage. The only reason I wouldn't is because of health concerns and if they have that bad of health I probably can't do anything.

 

[Rearden]

Kentucky has that non-contestability law with new policies as long as you file a replacement notice that's replacing the old policy, right?

That's sweet -- I would be very hesitant to replace a person who has health issues for the same coverage to pull cash value out of, if we had to start contestability all over again.

I bet good Kentucky agents have a disproportionally higher replacements as a percentage of business than the agents elsewhere on average.

I would estimate that 30 to 40% of my business is replacement. In the case you mentioned of them having $5K and want more I will always look first to replace it.

I replaced one this week for the exact same price she was paying. She bought a CL 4 years ago and now I could get her the exact same coverage for the almost the exact price. it was 6 cents a month higher, but she had $500 CV in the CL policy that she gets now. As you know, $500 is world of money for he FE market.

It's rare that I don't replace in that situation of adding coverage. The only reason I wouldn't is because of health concerns and if they have that bad of health I probably can't do anything.

 

[jdeasy]

Kentucky has that non-contestability law with new policies as long as you file a replacement notice that's replacing the old policy, right?

That's sweet -- I would be very hesitant to replace a person who has health issues for the same coverage to pull cash value out of, if we had to start contestability all over again.

I bet good Kentucky agents have a disproportionally higher replacements as a percentage of business than the agents elsewhere on average.

Yes Ky does have that protection, but most of my business is in Indiana. Probably 70% of my business is across the river. This one I mentioned was in In.

 

[rousemark]

Kentucky has that non-contestability law with new policies as long as you file a replacement notice that's replacing the old policy, right?

That's sweet -- I would be very hesitant to replace a person who has health issues for the same coverage to pull cash value out of, if we had to start contestability all over again.

I bet good Kentucky agents have a disproportionally higher replacements as a percentage of business than the agents elsewhere on average.

I believe Kentucky agents are limited in what they can do when it comes to replacements as many companies will not accept replacement business from KY.

 

[Newby]

As long as you don't cut corners on health questions. Don't allow ANY gray area. And they don't lie. And they don't commit sucide. Then replacement should not be a problem IF it is in their best interest.

It WILL definitely slow down the death claim even in Kentucky where it's non-contestible. ALL companies will go through the motions of contesting it. In Kentucky they still have to eventually pay the claim but I'm sure they are checking to see if the agent is doing his job right or "clean-sheeting" everything.

SO, if the family would totally depend on that policy to pay for a funeral (dirt poor) and they have a non-contestible whole-life policy, I would be reluctant to replace it unless I could save them a HUGE amount of money. If theirs is term or UL (without guarantees) I would easily replace it.

 

[Rearden]

Send some of that LH/SR inventory bulid-up down to East Tennessee, please.

It's amazing to hear someone would be placing upwards of 40% of their new business as replacements -- there must be a slew of garbage policies up in your neck of the woods.

AARP term is probably the most replaced program I come across.

 

[jacobtn]

AARP & Globe. Lately I've come across a ton of American General also that was total crap.

I have a couple I am meeting with on Monday, they have med supps with one of my agents. She discovered (the agent) that they had two UL policies from the 80s with AGL that they are paying $200 per MTH for. $25,000 in cash value. When they bought them in 86, the agent told them they could retire off the cash value based on current interest rates. Haha....

I call AGL with them on a 3 way and found out that they are blowing up (CV going down- cost of ins. going up). So much for retiring off the cash huh?

Both are in perfect health, 65 yrs old. Gotta love those eh? Putting them in a GUL product with the target commission over 5k. They will get DOUBLE the death benefit for the same premium (using standard rating), by 1035ing over the cash. I'm splitting it with my downline since they basically brought the deal.

Oh by the way Reardon, I replaced 3 LH policies 2 weeks ago. Don't find them real often but always able to replace!