IPS Success Tip... Replacing Life Insurance Policies - Agent Training For Selling Life Insurance!

About Replacing Life Insurance Policies!

10/29/2020… Get the best insurance agent training. On one of the Facebook insurance agent training groups, there is an agent telling people how he writes a 30-year term for his clients. Then he replaces the life insurance each year to sell a lower premium 30-year term policy. And he does it just so that he will earn a new commission that year. When you are selling a new life insurance policy, just to make a new commission – it is wrong! It is bad for your clients, the insurance company, and the industry! And it is called churning! 

Churning is when an agent replaces a life insurance policy for another insurance policy with no changes to the coverage! Agents often churn policies just to get an new commission for the new policy that they swap in. State law has restrictions and additional rules on agents who want to replace coverage. This practice is illegal in most states and is also against most insurance company policies.

Churning (or replacing) a life insurance policy should be your last resort. And, it should only be done when it is in the client’s best interest. Yes, if you think hard enough, you can always find a reason to switch your client to a new life insurance policy. But, is it the right thing for you to do for your client?

Replacing Life Insurance Policies Is Bad For The Client…

Replacing life insurance is bad for your client because the 2-year contestable period will start over. So, if they die within 2 years, then the insurance company could contest the claim based on any misrepresentations (mistakes or omissions) made on the application. The suicide exclusion will also start over! This means that a company can deny the claim if the insured’s death is a result of suicide within the first two years.

Then most cash value policies, such as whole life, or universal life have surrender fees. These fees will decline over time. But, when you replace a policy your client will start over with a new surrender period. Plus, when you replace a policy that is within the surrender period, your client will pay a fee to transfer the cash value from one policy to another.

Remember, in many cases, your client will go through underwriting and another physical exam to get a new policy. So, if their health has changed they could end up paying more or they could be declined.

Then you will want to consider… Is the new company as financially sound as its current company? Is their performance history as good or better than their current company?

As you can see there is a lot more to replacing and selling a new life insurance policy than just comparing illustrations, benefits, and riders.

Replacing Life Insurance Policies Is Bad For The Company And Industry

When you replace a policy there is a cost to the company for underwriting, exams, commissions, etc. The higher the company lapse rate, then the more the company is spending per policy. And it takes years for a company to recoup those costs. This means if they lose a lot of policies in the first few years, then the cost of insurance will go up for everyone.

Over the past 30 years, the industry has had a lot of problems and a lot of complaints about agents churning, replacing, and piggybacking life insurance policies. Because of that, there are a lot of government agencies trying to regulate our industry. That is why the NAIC has added a lot of regulations about how we handle replacements.

Each state insurance department has its own rules and procedures for replacing life insurance. But they must include the NAIC minimum requirements that all insurers and agents must follow when they replace a policy.

The procedures require that you to inform the the client of the implications of a replacement. (what are the drawbacks) You must submit a notice of replacement signed by the client and the agent to the replacing insurer… And then they will send it to the existing insurer. (the company being replaced) And you must provide your client with a hard copy of all sales materials that you used leading up to the replacement.

NAIC has stiff penalties for violators! Which can include the loss of an agent’s or a company’s license, with a fine. Then it could order the insurer to make restitution or to restore the policy and cash values for the client. So, if you don’t follow the rules it could cost you your license and a fine!

The insurer is required to show that the state’s replacement procedures are in place. Including insurance agent training and a system to monitor the replacement activities of all producers.

Get The Best Insurance Agent Training To Do What Is Right For Your Client!

If you decide that replacing life insurance is in your client’s best interest, then you need to take the time to find the best possible policy for them. You want to make sure it is worth all of the trouble.

By the way, when you take the time to get the best insurance agent training you need to do a good fact-find… Then you won’t even be tempted to replace an existing life insurance policy. Because you will learn how to help people to find the money to get what they need and want… even now! 

“I urge anyone in the financial services business to get involved with the Insurance Pro Shop. Whether it’s from Lew, Jeremy, or Alex the training you will get you on the way to reaching your goals as a professional in the industry. They don’t “sugarcoat” what they teach. They are straightforward with their approach to training. What I’ve learned is that there are some “basics” to learn in this business. And if you don’t learn them you’ll probably experience what most professionals in the industry experience; mediocrity. Lew, Jeremy, and Alex at the Insurance Pro Shop will teach you the basics at attracting the right prospects and how to ask the right questions to help people with financial problems.” John Dandridge, IL (11 years in the business)

“I think anyone who has experienced Insurance Pro Shop in any capacity knows the first class training that Lew and Jeremy Nason offer agents, both new and experienced. But the one thing that makes the Nason’s special is how much they care about not only us, as THEIR clients… But OUR clients as well. The Nasons will not only help you increase your income. But if you apply what they teach you, you will truly become a trusted advisor of your community. You will also learn to sell the RIGHT way. The Nasons are wonderful people and I am very fortunate to have met them!” Oliver Chamberlain, PA (12 years in the business)


When Will You Get The Best Agent Training, Coaching, And Support For Selling Life Insurance?

Our Specialized Life Insurance Marketing, Leads, And Sales System…
With 90 Days Of Personal Insurance Agent Training, Coaching, And Sales Support!

Trusted Advisor Success Program™

Trusted Advisor Success ProgramOur Trusted Advisor Success Program is about you learning to help middle-income families to find the money to Live Debt Free And Truly Wealthy! It is about helping your clients and prospects to get all the cash value life insurance they need to protect their families. While you help them to save for a tax-free retirement, save for college, create a family bank, etc. (Using cash value life insurance and annuities!)

Check out our Trusted Advisor Success Program! Because you will get 90 days of personal insurance agent training, coaching, and mentoring… with back-office sales support! All from a team that has been training agents and advisors for over 40 years to help families to buy life insurance… So you will earn $250k or more per year selling life insurance!

We will show you how to find your best life insurance and annuity leads/prospects. So you will set great sales appointments. Then we will show you how to help your clients and prospects see and want to solve their money problems. We will also show you how you can help your clients and prospects to find the money so that they can take action right now! Then we will show you the best ways for you to present your solutions to your clients and prospects to close 9 out of 10 sales. So that you will earn $250K, or more this year selling life insurance and annuities like the legends.

It is the best life insurance marketing and sales system and training for insurance agents and advisors to learn how to help families!

When Will You Get The Best Agent Marketing Tips, Tools, Training, and Coaching You Need To Help Families… To Want Your Help?

Inside our Trusted Advisor Success Program, you will find all the best marketing plans, strategies, and ideas laid out for you! You will learn the best ways for you to use Joint Ventures; Educational Workshops and Seminars; Booklets and Free Reports; Referred Leads; Social Media; Client Newsletters; Annual Reviews;  and more – with all the tools, scripts, and more. Now you can find your best prospects and set your best sales appointments! Because your ‘special message’ to everyone will be all about how you help middle-income families to find the money to Live Debt Free and Truly Wealthy!

You will also learn the best insurance marketing and sales training for agents to use all the HOT Sales Concepts… Wealth In Motion, Infinite Banking. Missed Fortune, Circle Of Wealth, Wealth Beyond Wall Street, Tax-Free Retirement, and more… Because they are part of our Trusted Advisor Success Program. Now you can help average people – not just the wealthy!


When Will You Learn How To Help Families… So you will sell lots of life insurance today! 

Living Debt Free And Truly WealthyMiddle American Family’s Guide To: Living Debt Free And Truly Wealthy!
By Lew Nason, LUTCF, CTA, RFC Retired And Jeremy Nason RFC, CTA

We urge you to take the time to read our 20 Chapter book ‘Middle American Family’s Guide To Living Debt Free And Truly Wealthy!” Because we give you the complete strategies, on how you can help middle-income families to find the money to spend, save, invest, insure, and plan wisely for a secure future! So that you can help them to “Live Debt Free and Truly Wealthy!” As a result, by the end of the book, you will understand our philosophies, concepts, and techniques. And finally, you will know how you can make a real difference by helping your family, friends, clients, and neighbors get rid of their debt. So they can save for retirement… And so they will have a secure financial future! Only $18.97 – PDF, Immediate Download, ORDER Now!


Nothing Will Change Until You Make it Change. So Now It Is Up To Get The Best Agent Training You Need For Selling Life Insurance To Make It Change!

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Recommended By The Members Of The IARFC - Replacing Life Insurance Policies JIs Bad For Everyone! - Agent Training For Selling Life Insurance!