Final Expense Terms
In this training series we are going to review some commonly used Final Expense Terms in the final expense industry. First we’ll start off with final expense insurance, this is a whole life insurance that is intended to cover burial and funeral costs as well as any other death related expenses. Final expense is generally a simplified version of traditional whole life, rather than your client having to go through medical tests and having an investigation into their medical history as with traditional whole life they are simply approved by answering a few health questions.
Final Expense Terms getting started
Whole life insurance, insurance on the life of the insured for a fixed amount at a definite premium that is paid each year in the same amount during the entire life time.
Term life insurance is life insurance, which provides coverage for a limited period of time. Term life is best suited for clients who want to cover debt, children, businesses, etc. you get a much larger amount for a lot less money. One good option is a specific type of term life insurance called guaranteed convertible. This means at the end of the term the client is allowed to convert their policy into a whole life policy without any health questions at or during the duration of end of the term. Generally it can be converted at a lower face amount. This helps justify the term period and usually ends up being the best option for al ot of clients.
Graded policy, a graded policy is a policy that has restrictions for a certain amount of time. Usually its because your client has some type of health problem. Most companies will offer a 30% benefit for the first year of coverage, a 70% benefit the next year and 100% the third year and on. These graded figures only apply when the cause of death is due to health problems. Final Expense Terms, If your client dies in an accident then they are covered 100% from the very first day.
Modified policy, this is for your very sick clients. There is a 2 or 3 year period wait where there is no coverage at all except for accident. This means your client pays for those years and basically has no coverage. However their beneficiary does get their premiums back with some interest if they were to die during this time.
Guarantee issue, this is a policy that has no health questions, your client can qualify for it no matter what their health situation is. They must purchase it in a state that is available and be in the correct age ranges for the policy.
10 pay or 20 pay is a policy limited to 10 or 20 years of payments and then is considered paid up. NO more payments are due after a certain date. Final Expense Terms
Fully underwritten, this means the insurance company reserves the right to check your clients entire medical history by ordering medical records from doctors, etc. it also means that the applicant is much more detailed depending on the face amount of the policy. The insurance company will often require that a nurse visit your client’s home. The nurse will check their vitals, blood, and urine among other things. If a nurse is required its best to make the appointment with the nurse while you are with the client. Never wait for the insurance company to do it for you. The disadvantage to fully underwritten policies is that it takes 2 weeks or longer to get approval and your client is more likely to be declined or rated up. Rated up means the premium is higher than you quoted and you have to explain it to them, which usually doesn’t go over too well. The advantages are your client gets a much better rate, more coverage and if they have some health issues that aren’t too serious they can often get approved at a higher premium after an underwriter does some investigation. This is called table writing.
E and O, or errors and omissions insurance, this is liability insurance for an insurance agent. Many companies require that you have this.
More Final Expense Terms
Commission, this is what is paid by the insurance company to the agent for selling their insurance policies. Final Expense agency
Advanced commission, an advance is when an insurance company gives you your commission in a lump sum rather than monthly. Usually it’s a 75% of the first year premiums or 9 months of premium payments.
As earned, this is when you get your commissions as your client pays. So if they’re paying monthly you get paid your commission monthly. If they pay yearly then each year you get a commission check. Final Expense Terms
So these are a lot of the Final Expense Terms frequently used in the final expense industry. Thanks for attending this training or next audio. Have a great day , thanks for your time and as always great selling.