I just completed a conversion of a term insurance policy for a client who truly didn’t have any other options. Having shopped the world, due to a particularly aggressive prostate cancer, we weren’t able to wrote a new policy for him.
His term insurance was through Phoenix Life, a company that has steadily declined over the years and as it sank lower and lower, it thought up ways to strip away guarantees and help ensure that what money was coming in, didn’t go back out as death benefits. In the case of Phoenix Life they targeted the conversion options on their term policies and made even their very best option, well, pathetic.
What they offer their loyal customers is a universal life policy with a whopping 5 year guarantee. In this case the client truly had no other option and for business purposes had to take this slap in the face.
I have recently been lambasting West Coast Life for squishing their conversion option down to a 10 year guarantee. I’m sorry, but I think it is immoral for a company not to offer a lifetime option, even if it costs more, for conversion. I have been assured by West Coast Life that they are on track to re institute a fully guaranteed product as a conversion option. I stand ready to applaud when that’s done.
Bottom line. Conversion is one of those components of a term insurance policy that make it the great value that it is and people expect that they will be able to convert to a lifetime guarantee. That’s what it’s supposed to be.