6
External Term Conversion Program Producer Guide LIFE INSURANCE For Producer or Broker/Dealer Use Only. Not for Public Distribution.
External Term Conversion Program
Producer Guide
LIFE INSURANCE
For Producer or Broker/Dealer Use Only. Not for Public Distribution.
WHY CONVERT?We all know that term insurance serves a very useful purpose, especially when a client needs the greatest amount of protection available at the most affordable premium. 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
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 a mortgage – Supplement retirement income – Help cover financial emergencies
Flexibility to adjust premium payments in some policies to accommodate changes in their lifestyles
Guaranteed protection for life3
For Producer or Broker/Dealer Use Only. Not for Public Distribution.
1 MetLife collectively refers to Metropolitan Life Insurance Company and MetLife Insurance Company USA.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
External Term Conversion OverviewThrough the External Term Conversion program, MetLife1 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.
2
Eligible CarriersWHICH 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.
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.
For Producer or Broker/Dealer Use Only. Not for Public Distribution.
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 Company4
Midland National Life Insurance Company
Minnesota Life Insurance Company
New York Life Insurance Company4
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 Company4
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
Program GuidelinesThe following guidelines have been established and must be followed in order for a non-affiliated term policy to be eligible for conversion:
ELIGIBLE POLICIESMinimum 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, 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.
A portion of the term policy can be converted but nothing is allowed to be retained with the external carrier.
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 also be 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.
3
For Producer or Broker/Dealer Use Only. Not for Public Distribution.
INELIGIBLE POLICIESThis 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 All currently available individual permanent life products
offered by MetLife are eligible for conversion.
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®, Enhanced Care Benefit Rider, and Accelerated Death Benefit Rider (ADBR) 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.
OTHERAs 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 or conversion age on the new permanent policy must be 18 to 65 inclusively.
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 33647. Policy Specification page (or copy) showing the insured, insured age, date of issue, classification etc. is acceptable.
Partial conversions will be accepted, but the original term policy must still be mailed to the Tampa New Business Center as no portion can be retained with the original carrier.
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 CaseOVERVIEWThe 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
For Producer or Broker/Dealer Use Only. Not for Public Distribution.
SUBMISSION REQUIREMENTSYou 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 if underwriting is 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 conversions, we must have confirmation from the non-affiliated carrier that the original term policy was cancelled.
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 company.
MetLife Promise Whole Life 120 is issued by MetLife Insurance Company USA on Policy Form 5E-12-12 and in New York only by Metropolitan Life Insurance Company on Policy Form 1-15-13-NY. MetLife Promise Whole Life is issued by MetLife Insurance Company USA on Policy Form 5E-12-10 and in New York only by Metropolitan Life Insurance Company on Policy Form 1-15-13-NY.
BDTM24521 L1214401692[1215]© 2014 METLIFE, INC. PEANUTS © 2014 Peanuts Worldwide
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
MetLife Insurance Company USA 11225 North Community House Road Charlotte, NC 28277
Metropolitan Life Insurance Company200 Park AvenueNew York, NY 10166metlife.com
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 POLICYThe 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.
