The Sale of Simplified Issue and Guaranteed Issue Policies

The Sale of Simplified Issue and Guaranteed Issue Policies

How to make the sale of these products profitable

Two reasons to sell the products.

Products that are underwritten on a simplified issue or guaranteed issue (SI/GI) basis are not big money makers. The face amounts are small, and the commission percentage is typically lower than a fully underwritten product. They also frequently are designed to provide a partial death benefit in the early years, which can be a handicap to the client.

At the same time, they can have a role to play in family and business financial planning, and therefore should be in the product portfolio of a life insurance salesperson. First of all, they can cover final expenses. If you believe in life insurance, then you believe that everyone deserves a decent burial. Even people of modest means are determined to do that, and it is honorable for brokers to help them get a policy on a loved one.

In addition, some people need more substantial amounts of insurance but just are not eligible for a fully underwritten product. They unfortunately have too many serious illnesses, or other very high risk factors. In these cases, many simplified issue and guaranteed issue products can be stacked to meet the need for life insurance as much as possible.

My business model for this marketplace.

I do not prospect for this business. However, I do sell these products as favors to clients and referral centers.

I treat every candidate the same. Everybody gets prequalified to insure an approval at the rate quoted.

I have relationships with a number of wholesalers who distribute these products. Just as I do with fully underwritten products,  I need to have affiliations with different general agencies to have access to a wide variety of carriers. Research into new vendors offering new companies and products is conducted on an ongoing basis.

The sales process with referring brokers. 

1. Refer the client to me for prequalification. I will determine whether they can be fully underwritten, or are eligible only for a simplified issue or guaranteed issue product.

2. If they can be fully underwritten, we will proceed with complete prequalification. The case will follow the normal route for substandard business, with the usual case split.

3. If they cannot be fully underwritten, I will have one of our distributors provide a SI/GI quote. The quote will then be forwarded to you. You will be responsible for closing the sale, obtaining underwriting requirements, and delivering the policy. You’ll be appointed to the carrier through the GA, and receive commissions directly. 100% of the commission will be yours. I will be compensated by the distributor.