The biggest of the on line life insurance agencies is a master at tying up customers and shielding them from the truth and often better deals that might come from competitors.

Bait and switch is the first line of offense or tactic. I’ll use a very recent true example. A client called Selectquote and completed an interview in which he admitted that he had been using Paxil, an anti depressant for a few years. The agent quoted Banner Life preferred plus rates. Banner has never given preferred plus to anyone on anti depressants. Agents at Selectquote know that. And even if it was a new agent that didn’t know that for some reason, then he shouldn’t have been flipping out quotes without some supervision.

The client said he would think about it and the next call he gets is from an examiner to schedule an exam. Not really sure what was going on he went ahead and scheduled an exam. The scheduled exam is their second line of offense. After the exam was scheduled the agent called him back and said that it didn’t look like, because of the Paxil, he would get the rate quoted, but that they should go ahead with the exam and see where it ended up.

In the meantime their client contacted me and I shopped his case. Banner’s offer was standard plus, but we got preferred plus offers from two other companies, a two rate class difference. That’s about 50% lower than the Banner rate. I provided those quotes to the client and he called Selectquote and told them Banner wasn’t going to be good enough, that he had better quotes.

The third line of offense is making exams unavailable to other agents or agencies. So, if a customer starts feeling like they’re getting the run around, it means they have to have another exam to switch horses. While the exams are no big deal, it’s a busy world out there and most people won’t switch to another agency if it means taking another exam. They will stay where they’re getting messed with because it’s more convenient. The big on line agencies know that. Most agents and agencies don’t put this kind of hold on exams.

So the client was told that since he had the exam already they would go ahead and run an application through one of the other companies that I had quoted. They told the client that it was all the same, that if they couldn’t get the better price then I wouldn’t be able to either. To put it nicely, that simply isn’t true. I’ve beat big on line agencies time after time by simply doing a more thorough job of putting an application package together.

If this client hadn’t sought a second opinion, Selectquote would have placed a higher price policy with him. I get fussed at every time I bring one of these issues up with the “big boys”, but the truth is they are so big that they have forgotten how to treat people as valued customers. Their highest priority is volume and their bottom line. They hang their hat on the fact that they write 100,000+ policies a year.

The only way for customers to win is to walk away from the deal when they feel fenced in or run around. The tactics I’ve talked about only work if you let them.

Bottom line. Life insurance agents should be in the business to serve and do their utmost to make sure that every customer they help gets the best possible policy and price they can. The big boys have logistically outgrown the ability to do that.

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