Review the Policy
Using the specifications page in the policy, review the coverage provided, the premium, and the beneficiary/ownership provisions and spellings. Explain any supplemental benefits included in the policy. Use the NAIC policy ledger illustration (if applicable) to review the policy's benefits and values. If appropriate, emphasize that the cash values will grow on both a guaranteed and non-guaranteed basis and be available through withdrawals to basis and loans in the future for such things as business opportunities, college tuition, weddings, emergencies, and/or retirement.
You must also satisfy your state's disclosure requirements. In the interest of the consumer, most states have enacted legislation requiring that policyholders be given information regarding the future values of a policy for purposes of comparison.
Most states require that, at policy delivery, the policyholder be provided with a "Policy Summary" — a statement that contains certain policy costs and benefit information. Since no two policies are structured the same way, consumers find it difficult to compare policies. As a result, cost indexes, which consider the "time value of money," were developed to provide the consumer with a way to compare policies of a similar type (whole life to whole life; universal life to universal life).
Flip through the policy, section by section, explaining the purpose of each and what it means to the client.
If the policy has been issued other than as applied for, or rated, you must understand the reason for the rating and be able to explain it to your client. Sometimes, a probable rating will be obvious when you take the application. For example, your proposed insured is obviously overweight. In these cases, prepare your proposed insured in advance for a probable rating.
Otherwise, you should explain the reason for the rating, stressing that, if anything, the physical impairment or condition makes the need for the insurance even more urgent. It is possible that a worsening of the condition could even make the person uninsurable.
If you have done a thorough job in establishing the needs and wants for the insurance, and in explaining the purpose of the underwriting process (risk classification), most clients will accept a rated policy with an additional premium.
Ohio National is not affiliated with, nor does it endorse or sponsor, any particular prospecting, marketing or selling system.