Most clients bought their life insurance years ago for a good reason. Then they filed the policy away and kept paying the premium without looking at it again. But when the kids are grown and the house is paid off, the premium feels like money going nowhere. Now’s the time to ask, “What else could your policy do for you?”

A policy is one of the few assets on a client’s balance sheet no one is managing. You can help change that.

Why do clients ignore the policy?

No one likes to think about their own passing, so the policy gets filed and forgotten. And most clients aren’t insurance experts. Terms like “conversion privilege” or “1035 exchange” don’t mean much to them, and few know a policy can be sold. Many haven’t looked at it in years. Starting that conversation is where you could add value.

A good review skips the mortality discussion and starts with a practical question: Is this policy still doing the job? If not, what else could it do?

When the right answer is to leave it alone

Sometimes the policy is right where it should be. A spouse still depends on their loved one’s income. A business partner is counting on buy/sell funding. An estate plan relies on the death benefit. It’s worth confirming whether the coverage still fits. (And clients remember you went the extra mile to check.)

When those needs change, paying premiums every year without a second look could leave real value on the table.

What a review can uncover

• Does the term policy have a conversion privilege, and when does it expire?
• Is the cash value doing as much as it could?
• Does the client still need this much coverage, or a different kind?

Depending on the answers, there are three common ways to put an existing policy to work:

Convert it.

Many term policies include a conversion privilege that lets the owner move to permanent coverage without new medical underwriting. For a client whose health has changed, that may be the only route to lifelong coverage. The privilege expires on a date set in the contract, so timing matters.

Exchange it.

A Section 1035 exchange can move a policy’s cash value into a new life policy, an annuity or a qualifying long-term care policy without triggering income tax on the gain at the time of the exchange. A cash-rich policy bought decades ago might support a larger death benefit, care funding or income today.

Sell it.

When coverage is no longer needed, a life settlement may pay the owner more than the policy’s cash surrender value. For an older client about to let a policy lapse, it’s worth checking first.

Where you come in

Your clients may not expect you to be an insurance specialist, but they do count on you to catch what they miss. You’re already looking at their whole financial picture. Life insurance should be part of the discussion. All it takes is one question:

“When was the last time you thought about your life insurance policy?”

For many clients, that question starts a conversation that’s long overdue. When it does, bring us what you find, and we’ll help you lay out the options, from conversion to settlement.

Let’s talk

Reviews are good for your practice, too. A second look can lead to a conversion, an exchange, a settlement or new coverage, and that’s new business with a client who already trusts you.

Pat McEvoy
VP, Life Sales

Rena Nicholson
SVP, Life Sales

Call Pat & Rena at 913-814-0510

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