Not All Term Plans are Equal

August 10, 2022
Published by: Christy Downs

A client reaches out to you for a quote on a term policy.  As an independent life insurance agent, your first reaction might be to login to your IMO/NMO/FMO’s term quote engine and send your client the cheapest term available. You are hoping for a quick sale with easy underwriting and fast commissions because your client is ready to buy now.  What if you focused more on value instead of price?  What would that look like? 

FFP Insurance Services trains our agents and agencies that life insurance premiums should be compared based on value not price.  If a term policy with robust living benefits and a great conversion option cost for example only $5 more a month, would you offer that to your client*? 

Understanding all the benefits of the products that you are offering to your client is key to finding the best value life insurance policy.   A few benefits that can be of great value to your clients are living benefits (chronic, critical, and terminal illness), conversion options, and unique fraternal organization member benefits.  

Living Benefits

Living benefits offer the highest value to any life insurance policy because they allow for partial death benefit payout if the insured is diagnosed with cancer or has a heart attack or stroke or is deemed terminally ill.  In other words, your client will be able to use the policy while living!

Conversion Options 

Great conversion options also add utmost value to a term policy because the client can move to a permanent policy without evidence of insurability.  The key to a great conversion option is understanding what products are available for the conversion. Does the carrier allow the client to convert to any current permanent product or is it limited? If the conversion product is limited be aware that it’s likely not a great product. 

Member Benefits

Member benefits are offered by life insurance fraternal organizations and vary.  Understanding what benefits are offered is key to making sure the carrier fits the client.  For example, some life insurance fraternal organizations offer scholarship opportunities, legal services, orphan benefits, and diabetes supplies for free.  If any of those benefits are a great fit for your client what a great value a term policy would be to that client. 

In short, not all term policies are equal. Understanding the value added to term policies with living benefits, conversion options, and fraternal benefits is key to setting up your client with a successful life insurance plan.