Training Handout: New Individual Life Insurance Application

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1 Training Handout: New Individual Life Insurance Application Effective April 1, 2012 AN EASIER FORM TO BETTER SERVE YOU! Starting April 1, 2012 all preneed agents will use the new and improved Individual Life Insurance Application PN APP covered in this training handout when completing a preneed contract. Please destroy or return all old Insurance Applications to your Manager, Sales Director or our Marketing Department. You may start using the new form immediately upon receiving your supplies. Applications dated on or after April 1, 2012 MUST be submitted on the new application. WE MADE CHANGES TO HELP YOU! Form is Easier to Complete! Agents are less likely to make mistakes. Simplified Health Questions! Agents are more likely to select the appropriate coverage when completing the application. The new Insurance Application will result in fewer mistakes and less application processing time. You can earn commissions faster!!! TRAINING EXAMPLE: Use this example to complete the Individual Life Insurance Application PN APP found on the following page. John A. Smith is a 60 year old male, height and weight is 5 feet 10 inches, 190 pounds. Mr. Smith has lung disease and has no other health conditions. Mr. Smith qualifies for a Series 1 Graded Benefit plan and wants to purchase the following: $6, Contract Monthly Bank Draft Payments 5 Year Payout Accidental Death and Deferred Payment Rider 1

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3 Individual Life Insurance Application Completion Guide NOTE: The numbers below refer to the boxed numbers found on page Smith, John, A M 1/6/ Anywhere Drive Austin TX Susan Smith spouse Adam Smith son Write in the PRENEED CONTRACT NO. that is found at the top of the Prepaid Funeral Benefits Contract. Write in the Proposed Insured s Name, Gender, Date of Birth, Age, Height, Weight, Social Security Number, Address, Home Phone Number, Cell Phone Number, Primary Beneficiary/Relationship to Insured and Contingent Beneficiary/Relationship to Insured. JS Health Question #1: Clearly check () NO TO ALL CONDITIONS IN QUESTION 1 or YES TO ANY CONDITION IN QUESTION 1. In our training example, Mr. Smith is clearly checking () NO. NOTE: Amyotrophic Lateral Sclerosis (ALS) is a new condition found in Health Question 1. This condition is commonly referred to as Lou Gehrig s disease. Individuals with ALS will have trouble with muscle strength and coordination which makes it difficult to walk, speak, eat, swallow and breathe. (Source: webmd.com) If you have any questions regarding this or any conditions on our application please contact our New Business Department. 3

4 Health Question #2: If answered yes to any condition clearly check () the box on the line that contains the condition. If none apply check () NO TO ALL CONDITIONS IN QUESTION 2. In our training example, Mr. Smith has Lung Disease so check () the box to the left of Lung Disease or Disorder. Proposed Insured s Initials: Proposed Insured initials health questions to indicate he/she completely agrees with the answers to Health Questions 1 and 2. In our training example, Mr. Smith initials below the health questions. 3 6, COVERAGE: Clearly check () the appropriate box to select coverage. In our example, Mr. Smith qualifies for a Graded Benefit and the agent is selling a Series 1. PAYMENT TERMS: Clearly check () the appropriate box to select the payment method, payment plan and premium mode. In our example, Mr. Smith is going to make monthly payments by bank draft for 5 years. POLICY TYPE AND RIDERS: Enter the Multi-Pay Face Amount, Premium, Deferred Payment Rider premium and Accidental Death Premiums. Then add all the premiums together and enter that number on the Premium Total line. In our example, the face amount of the contract is $6, and the premium is $ (6, X = ). Use our TSLIC Rate Calculator or your rate chart to calculate premiums. The premium for the Deferred Payment Rider is $3.72 (6, X = 3.72). The premium for the Accidental Death Rider is $6.24 (6, X = 6.24). The Premium Total is $ ( = ). Initial Amount Collected with Application: Enter the amount collected with the application. This number is the Premium Total found in the POLICY TYPE AND RIDERS box. In our example, this amount is $

5 FREE CHILD RIDER: Enter the number of children, grandchildren and great-grandchildren to be covered by this policy under the FREE CHILD RIDER. In our example, Mr. Smith has 5 grandchildren that will be covered under the Child Rider. 4 John A. Smith Abigail Lynn 1216 Abigail Lynn Clearly check () AGENT HAS MET INSURED IN THE PROCESS OF TAKING THE APPLICATION or AGENT IS RELATED TO THE INSURED. If an agent does not meet the insured, the only plan that can be sold is an MIB No Health Questions. In our example, the agent, Abigail Lynn, has met the insured in the process of taking the application so the box is clearly checked (). She is not related to the insured. Print your name, Agent Number and sign the application. The Proposed Insured signs and dates the application. If an Owner signs the application, make sure to include their signature, printed name, address, phone number and relationship to the Insured. Insurable interest must exist in order for an Owner to sign the application. Insurable interest exists when the Owner is a spouse, father, mother, son, daughter, grandparent, grandchild, brother, sister, or a person with a Power of Attorney. 5

6 NOTE: The following section is found on the back of the Individual Life Insurance Application: Please note item (b) Contestability period is a new addition to the back of the Individual Life Insurance Application. It is extremely important to know that a preneed life insurance policy has a contestable period of two years from the policy issue date. If the primary Proposed Insured should die within the first two years of the policy issue date, any false or misleading information contained on the application is grounds for the denial of a claim. Please make sure your customers understand contestability and make sure the information contained on the application is correct and complete in order to avoid problems in the future. 6

7 Enhanced Value Program The Enhanced Value Program is ONLY available with the Series 1 and 2 Full Benefit SINGLE PAY Plans. This program is designed to benefit funerals homes by providing enhanced growth in the first year of a policy. The initial death benefit of the policy is equal to the single premium paid, but after 31 days, the death benefit increases to the Enhanced Value. Also, the agent commissions are calculated on the Enhanced Value face amount. Complete the application as shown below: For example: Michael J. Smith is a 60 year old male, height and weight is 6 feet 2 inches, 225 pounds. Mr. Smith has no health conditions. He qualifies for a full benefit plan and would like to make a single payment for the full amount of his contract. If you elect to use the Enhanced Value there is no premium calculation to make (no Single Pay Discount) on the application. The face amount of the contract is the total premium amount, as illustrated in the above example. To calculate the Enhanced Value, divide the face amount by the single premium factor. For example:.909 (Single Premium factor) = 5, = Enhanced Value For additional assistance with the Enhanced Value calculation, download the new rate calculator available April 1, Please note that as the applicant s age increases the Enhanced Value decreases. 7