Spring has sprung and you know what that means? Time for a little spring cleaning. What’s on the top of your list? The garage? Your closet? Kitchen cabinets perhaps? While it may not be everyone’s favorite thing to do, you can’t deny the fantastic feeling you get from a little refresh! Why not experience that feeling at work, too? And no, I’m not taking about cleaning up your desk (although it may not hurt). I’m talking about brushing up on some professional resources to get a fresh start to the season.
A question that I often hear from life insurance and reinsurance professionals is ”what happens at the end of a term life insurance product?” Well, the answer is that once it comes to an end, you may have the option to convert it to a permanent product. Converting a policy happens quite often and in reinsurance, it is important to adhere to the terms of the treaty, otherwise, it will cause a downstream impact when claim time approaches. As a reinsurance analyst, we all struggle with administering conversions from time to time, especially in scenarios where there have been many amendments to a treaty or treaty information is difficult to identify. When I administer term conversions like these, there are three questions I typically ask myself to ensure I’m following the guidelines of the treaty. (PS – see here for a great overview of what a Reinsurance Treaty is as well as Seven Essential Components!)