How to Sell Decreasing Term Insurance
Decreasing term life insurance is a temporary life insurance policy with a death benefit that decreases over time. The death benefit may be scheduled for terms up to 30 years and is most commonly used to insure debts that are scheduled to be paid off after a specific amount of time. You must understand how this type of insurance is sold, however, since it's not intended for income replacement unlike other types of term life insurance.
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Instructions
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Assess your client's financial goals. Taking out loans, or going into debt, would warrant buying a decreasing term life insurance policy since the death benefit of a decreasing term policy decreases over time. Normally, decreasing term life insurance is sold to individuals or families with a mortgage. The decreasing death benefit decreases with the loan balance and is scheduled to terminate when the mortgage is paid in full. These policies are designed to provide life insurance death benefit protection over 15 or 30 years to pay off the mortgage, or some other debt, if the client dies before the mortgage (or other debt) is paid off.
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Determine the type of mortgage (or other debt) your client has as well as their future plans for the loan.
Consider a mortgage loan as an example. Does your client intend to pay off the mortgage in 30 years? Or will your client refinance the mortgage over time? What your client does with his mortgage is vital. A decreasing term life insurance policy only covers the original mortgage. If the mortgage balance increases, the mortgage will be under-insured. If the mortgage decreases and is paid off on schedule, however, the policy will be suitable for the client.
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Fill out the application and collect the premium. Include the client's name, address, Social Security number and all of his health information. The insurer will need to know about his current health as well as his medical history. You'll need his driver's license number as well as the beneficiary for the policy. Finally, make sure the client signs and dates the application. You must also sign and date the application and collect the first premium payment. You'll then issue a temporary insurance binder to the individual. Once the application is processed and the policy application is approved, the insurance company will issue the policy to the client.
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