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If you would have told me 10 years ago that I would be writing a blog talking about the end of one of the most important features of a term life insurance policy, the ability to convert to a permanent life insurance policy, I would have probably laughed at the idea. Not that I’m all that old, but my first life insurance school was back in 1978 and I had it drilled into me that this conversion option was, simply put, second only to the death benefit in importance. It answered the question, “what do I do if my term runs out and my health has changed” by promising the option to convert “without evidence of insurability” at the “same rate class as the original policy” to a permanent policy. Although there are plenty of life insurance companies that would like to redefine permanent to “something that might last your whole life if all the right stars line up”, I don’t think it’s an ambiguous word at all. If it’s permanent, it should be guaranteed not to go away.
While I might be missing some event that preceded the West Coast Life conversion abortion of 2009, for me and many of my colleagues it was the first time a life insurance company had so blatantly, yet secretly gutted all existing term life insurance policies. They did so by changing their conversion product from one of the industry’s leading and best no lapse guarantee UL’s, to a policy that amounted to more than a grossly overpriced 10 year term policy. I say it was blatant because it was planned and thought through and amounted to premeditated murder of valued customer benefits. I say secret because West Coast Life and Protective Life made this change without any kind of notice or warning to its’ long term valued customers and absolutely no heads up to its agents in the field. We, assuming nothing had changed continued to sell the term product and give bad information and advice to customers about the value of the conversion option. To this day agents are still only finding out about the change because they ask for a conversion illustration from the home office.
After a year of screaming and yelling at the top of my blog lungs I was summarily relieved of my ability to sell their products anymore. They say they really let me go for another reason, but they had their legal department monitor my forum and told me that if I didn’t mention them for a year they would consider a reinstatement. It wasn’t something I wanted, being reinstated to sell crappy products for a scum bag company, so just before the year was up I wrote a scathing post about how they had done absolutely nothing over the last year to correct the messes they created. Within a day they confirmed that I would never be reinstated. I’m just glad I could tie up their legal department reading my blog for a year. They probably learned more about life insurance during that year than they would ever know from working at West Coast Life.
Bottom line. 2009 was the beginning of what has turned into an industry trend of screwing valued customers to try to build up the bottom line. I guess if you’re West Coast and Protective you could claim to have been the pioneers, the first to have boldly screwed their customers but there’s more to this story. If you have any questions, call or email me directly. My name is Ed Hinerman. Let’s talk.