Producer Guide. External Term Conversion Program LIFE INSURANCE UPDATED DECEMBER 2012

Transcription

1 External Term Conversion Program LIFE INSURANCE Producer Guide UPDATED DECEMBER 2012

2 External Term Conversion Overview Through the External Term Conversion program, MetLife 1 will allow a conversion from an eligible unaffiliated company s term policy to a MetLife permanent insurance policy without a medical exam or blood test. All conversions must meet the program and suitability guidelines. WHY CONVERT? We all know that term insurance serves a very useful purpose, especially when a client needs maximum protection at a minimal cost. In most cases, the decision to purchase a term policy was probably the right one at the time. However, times and needs change: Families grow Income may have increased Term insurance may no longer meet the needs of your client They may not be aware of the many new products introduced over the past few years They may not be aware that the cost of term insurance can become prohibitive at older ages They may think that term insurance represents the only affordable choice for them When you meet with your clients and present them with the opportunity to convert their existing term insurance, you will be in the position to review their present financial situation and: Ascertain what products may suit their needs Convert their term policies Provide additional life insurance on them or other family members Obtain referrals Solidify your position as a financial services professional to their family or business By meeting with your clients you may uncover needs that are not being met by their current term coverage. Needs such as: Cash value from a properly structured and funded policy, which can be used to: 2 Help meet educational expenses Help repay their mortgage Supplement their retirement income Help cover financial emergencies Flexibility to adjust premium payments in some policies to accommodate changes in their lifestyles Guaranteed protection for life 3 1 MetLife collectively refers to Metropolitan Life Insurance Company and MetLife Investors USA Insurance Company. 2 Tax-free distributions assume that the life insurance policy is properly structured, is not a Modified Endowment Contract (MEC) and distributions are made up to the cost basis and policy loans thereafter. Should the policy lapse or be surrendered prior to the death of the insured, there may be tax consequences. Loans and withdrawals will decrease the cash value and death benefit. 3 Guarantees apply to certain policies. Guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company. 1

3 Eligible Carriers WHICH UNAFFILIATED TERM CARRIERS ARE ELIGIBLE? Because MetLife is waiving medical requirements, it is important to only convert policies offered by strong companies with responsible underwriting. The list of Eligible Carriers is reviewed annually with the opportunity to add new carriers. Clients who own an in-force term policy issued Standard or better in the last 60 months by one of the following companies are generally eligible for the program. Allstate Lincoln Benefit Life Company American General Life Insurance Company Old Line Life Insurance Company Aviva AXA Equitable Life Insurance Company MONY Life Insurance Company of America Banner Life Insurance Company Genworth Life Insurance Company GE Capital Life Insurance Company First Colony Life Insurance Company The Guardian Life Insurance Company of America Berkshire Life Insurance Company of America Hartford Life and Annuity Insurance Company Liberty Life Lincoln National Life Insurance Company First Penn Pacific Life Insurance Company Jefferson Pilot Life Insurance Company Manulife Insurance Company John Hancock Life Insurance Company Massachusetts Mutual Life Insurance Company 4 Midland National Life Insurance Company Minnesota Life Insurance Company New York Life Insurance Company North American Company For Life and Health Insurance Northwestern Mutual Life Insurance Company Ohio National Life Insurance Company Pacific Life Insurance Company Penn Mutual Life Insurance Company Phoenix Life Insurance Company Principal Life Insurance Company Protective Life Insurance Company Chase Insurance Life & Annuity Company Empire General Life Insurance Company Federal Kemper Life Assurance Company Zurich Kemper Life Insurance Company Provident Mutual Life Insurance Company State Farm Life Insurance Company Thrivent Financial Transamerica Life Insurance Company Union Central Life Insurance Company West Coast Life Western Reserve Life Assurance Company This list is subject to change. Group affiliates or subsidiaries of approved companies are not eligible unless they are already on the list of approved companies. 4 Only policies issued preferred rating classification or better are eligible. 2

4 Program Guidelines The following guidelines have been established and must be followed in order for a non-affiliated term policy to be eligible for conversion: ELIGIBLE POLICIES Minimum term face amount for conversion is $100,000. Lifetime maximum aggregate face amount from all approved External Term Conversion cases per insured cannot exceed $1,000,000. Conversions over $1,000,000 are not eligible for this program and must be underwritten. The term policy must have been issued within the past 60 months of the Part 1 date of the new permanent life insurance application. Term policies issued within the past six months are not eligible for the program. The term policy must be in force and premium paying and have been issued Standard or better under normal new business writing rules. The term policy must be within its contractual convertible period. Business owned cases will be allowed as long as the owner and insured remain the same. Primary insured and/or spouse term riders are eligible for conversion, provided the classification of the rider is Standard or better. All such riders must be also converted in their entirety; no partial conversions will be allowed. A policy with a classification of Smoker or Nonsmoker is a Standard classification. Some companies engage in a practice called Table Shaving, whereby several substandard table ratings are shaved to the Standard class. The list of Eligible Carriers identifies these companies and only term policies issued in the Preferred Class or better from these carriers are eligible. INELIGIBLE POLICIES This program is not available for applicants residing in New York. Non-NY resident eligible carrier term policies will be allowed. Subsidiaries and parent companies of approved companies are not automatically eligible. Approved subsidiaries are reflected in the list of Eligible Carriers. Policies issued on a simplified basis, guaranteed issue or as a result of any other special underwriting program are not eligible. Policies with flat extra premiums, SRCs or exclusion riders are not eligible for the program. Some companies may offer policy labels of Standard with a table or class rating; generally these policies are not eligible for the program. Policies on disability waiver are not allowed. Outside (traditional) term riders on permanent policies issued by approved carriers are not eligible for this program. No collaterally assigned policies are eligible for this program. Policies that are Universal Life policies designed to perform like a traditional Term offering (sometimes called Term/UL) are not eligible for conversion through this program. Modified whole life policies with term policy features are not available for conversion through this program. NEW PERMANENT POLICY The following products offered by MetLife are eligible for conversion 5 : MetLife Promise Whole Life ȘM MetLife Promise Whole Life 120 ȘM MetLife Provider Universal Life ȘM Guarantee Advantage Universal Life and Equity Advantage Variable Universal Life ṢM Best available classification on the permanent policy is Preferred Nonsmoker. Elite is not available. The Flex Term Rider is available on MetLife Promise Whole Life and MetLife Promise Whole Life 120. The Enricher, Accelerated Death Benefit Rider (ADBR) and Long Term Care Guaranteed Purchase Option Rider (LTC- GPO) are not available with this program. The Disability Waiver of Premium rider can ONLY be applied for if it was fully underwritten on the original term policy. If applied for, it is subject to full underwriting. Term conversion vouchers or credits are not available for this program. 3 5 Whole Life 2008 will continue to be offered in Washington, until MetLife Promise Whole Life is approved. Once approved, conversions will follow the transition rules for MetLife Promise Whole Life.

5 OTHER As with all life insurance sales, the transaction must be suitable for the customer and be fully supported by a financial needs analysis. The insured s issue age at time of application must be 18 to 65 inclusive. The insured and the policy owner must reside in the United States. This program is a solicited program; therefore, all stages of the new business process must be completed in the United States. The client(s) must cancel their previous term policy and payment agreement between themselves and the previous term company. Regardless of policy assignment, the payment arrangement is a separate contract between the client and the previous term company. The original term policy must be mailed to the Tampa New Business Center Attention Policy Change, 18210, Crane Nest Drive, Tampa, FL Duplicate policies are acceptable (lost policy declarations forms or policy summaries will not be accepted). Partial conversions will be accepted, but the original term policy must still be mailed to the Tampa New Business Center. All applications submitted for this program are to be completed on a Cash on Delivery basis to avoid double coverage under the existing term policy and the Temporary Insurance Agreement. When issued, these policies will follow MetLife s Cash on Delivery guidelines for non-variable policies, which require dating a policy 30 days into the future, but for this program the policy must be issued within the 60-month maximum time frame. If monies are received with application, payment will be refunded and you will be notified that temporary insurance is not in effect. How to Submit a Case Overview The External Term Conversion program allows conversion of approved non-affiliated term insurance to any currently available MetLife individual permanent life insurance product (no survivorship). Although External Term Conversion is an Enterprise program, only life products that are supported for sale by a producer s distribution franchise are eligible for that producer to convert to. 4 SUBMISSION REQUIREMENTS You and your client need to complete the following forms in order to take advantage of this program: 1) Using the Enterprise Life Insurance Application: If Disability Waiver is not requested: Sections one through six (only). Debit Authorization, if applicable. Data-enter special project code EC. The Certification/Agreement/Disclosure pages, with all signatures included. Producer Identification and Certification. Written confirmation of term policy cancellation. 6 If disability waiver is requested in accordance with program guidelines, or is underwriting required due to face amount on new policy being greater than term and/or eligible rider being applied for and/or aggregate face amount for all non-affiliated term policies exceeds $1,000,000, in addition to the above completed information, the application and any required forms (e.g., EAUTH, HIV Consent Form) must be fully completed, signed and dated. The Medical Supplement (EMED-48-07) form is required but considered optional if an examination is required. 2) Policies will be issued on a Cash on Delivery (COD) basis to avoid the possibility of double coverage unless home office has received confirmation of term policy cancellation. If home office has received confirmation of the term policy cancellation, the new policy may be backdated to avoid lapse in coverage. If home office only has documentation indicating intent to cancel term coverage, the new policy must be issued Cash on Delivery (COD). 3) Leave the Client Package booklet with the applicant DO NOT complete the Temporary Insurance Agreement and Receipt section. 4) Provide a signed sales illustration. 5) Complete all replacement forms required by the state of residence of the policy owner. 6 External Term Conversion Form EXTC1 is no longer used with this program. In its place, we require written communication from the customer indicating intent to cancel or actual cancellation of the term policy. The new permanent policy cannot be issued without this documentation. For partial converisons, we must have confirmation from the non-affiliated carrier that the original term policy was cancelled.

6 6) Mail the original term policy (lost policy declarations forms or policy summaries will not be accepted). 7) Other Requirements: If premium mode is monthly draft: Complete the monthly draft authorization form. Do NOT collect premium from the applicant. If new policy is the Equity Advantage VUL complete the Variable Supplement. Indicate External Term Conversion on the top of the first page and data-enter special project code EC. YOUR CLIENT S NEW PERMANENT POLICY The new permanent policy will be issued with the comparable rating class and smoking designation as the original term policy. Elite classifications are not available for the new policy. If the external term policy was issued with the issuing carrier s version of elite or super preferred, the new permanent policy will be issued with a preferred rating. In addition, since no insurability questions have to be answered on the application, unless additional benefits are applied for, there is no information in the policy on which to contest. Like most insurance policies, MetLife s policies contain charges, limitations, exclusions, termination provisions and terms for keeping them in force. Contact your financial representative for costs and complete details. All product guarantees are subject to the financial strength and claims-paying ability of the issuing insurance MetLife Promise Whole Life 120 is issued by MetLife Investors USA Insurance Company generally on Policy Form 5E and in New York only by Metropolitan Life Insurance Company generally on Policy Form 1E NY-A. MetLife Promise Whole Life is issued by MetLife Investors USA Insurance Company on Policy Form 5E and in New York only by Metropolitan Life Insurance Company on Policy Form 1E NY. January 2013 Life Insurance Products: Not A Deposit Not FDIC Insured Not Insured By Any Federal Government Agency Not Guaranteed By Any Bank Or Credit Union May Go Down In Value Life insurance products are issued by: MetLife Investors USA Insurance Company 5 Park Plaza, Suite 1900 Irvine, CA And in NY only by: Metropolitan Life Insurance Company First MetLife Investors Insurance Company 200 Park Avenue New York, NY metlife.com BDTM22718 L [1213] 2013 METLIFE, INC. PEANUTS 2013 Peanuts Worldwide