Replacing a policy you didn't sell: the conversation, the form, and where it goes wrong

You sit down and the client has a policy already. A phone room sold it eighteen months ago. Graded benefit, premium too high for the face amount, and they think it's full coverage. What now.

First, find out what they actually have. Ask for the policy or the last statement. Read the schedule page. Confirm three things: is it graded or level, what's the face amount, and what's the premium. Do not take the client's word for any of the three. Clients routinely believe a $10,000 graded policy is $25,000 level.

Second, decide whether replacing helps them. A replacement that saves $12 a month but restarts a two-year graded clock is not a favor. If the existing policy is level and rated fairly, leave it alone and sell them additional coverage if they want it. Agents who replace everything they touch get the complaint letters.

Third, the replacement form. Most states require a replacement notice signed at the time of application when any existing coverage may be replaced, plus a comparison in some states. The carrier will ask the replacement question on the app and will decline or delay if the answer doesn't match what they find on the MIB check. Answer it honestly and fill out the form completely. The form is the thing that protects you when the old carrier's agent calls the client and starts a fight.

Fourth, timing. Never cancel the old policy before the new one is issued and in force. The client stops the old draft, the new app gets declined for a prescription nobody mentioned, and now they have nothing. Old policy stays until the new policy's first draft clears.

Where it goes wrong. Agents who "forget" the replacement question to speed the app. Carriers see the existing coverage on the MIB report and the app either gets held or the agent gets a compliance letter. It is not worth the week you saved.

What's your rule for when a replacement is actually in the client's interest?