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In my last post I hope I made a clear distinction between a life insurance agent who is qualified to handle cases that involve health issues, and those who really shouldn’t play with sharp objects. At the end I alluded to the definitive way to separate the two groups.

First let me broach the subject of bait and switch. Baiting, telling the client that they qualify for a rate that they don’t, is a way to get the application. Getting the application is a way to get anyone who told you the truth out of the picture. Let’s say I quote you $1200 a year for a term insurance policy. I’ve presented my quote based on the fact that I know you have type 2 diabetes that was diagnosed at age 51 and we reviewed your last set of labs and I know that your hbA1c was 6.4. Another agent quotes you the same policy for $800 a year. Most people will jump on the less expensive band wagon and won’t even talk to me again.

The switch is when the policy is approved. Generally, because a bait and switcher just goes with their favorite company (where they get the highest commission), the approved rate will come back even higher than what I quoted. The B&Ser will come up with some song and dance about why the rate changed and then, having just drug you through a 2-3 month application process, suggest that unless you want to start over and take your chances, this is really as good as it is likely to get.

I know you’re all sitting there saying that you wouldn’t fall for that, but the truth is that bait and switch is alive and well because most of you will accept the higher priced policy rather than start over.
You sound mean, but you’re not.

Which brings me to the magic bullet. How can you weed out the B&Ser right up front? How can you tell if they’re telling the truth or just low balling a quote to capture the application? The bullet is called a trial offer. They way trial offers work is that, for instance, I would send an email out anonymously to the underwriters from all the companies I represent. The email might go something like this:

Proposed insured born 3/14/53, 5’10, 175, non smoker. Diagnosed 4 years ago type 2 diabetes. Most recent a1c 6.4. No other risk factors. All other labs normal. Good family history. Takes 500mg Metformin daily. Looking for $500k term insurance.

Insurance underwriters respond, always with the caveat that any final offer is subject to an exam and a review of medical records. There offers, and these are actual insurance company responses, come back like this. “Tentative ok without a rating if fructosamine is normal”, “Very tentative Standard No Nicotine subject to app,exam,labs,EKG and APS (attending physician statement)”, “Our tentative quote is Standard (due to glucose)”. Once received, we know which company will ultimately provide the best approved offer.

So here is the way to ferret out the bait and switch agent. If you are shopping for insurance and you have health issues, and one quote comes back significantly lower, insist that they provide you with a copy of the trial offer from the company they are quoting. If they don’t have one, they don’t know what they are doing. If they try to tell you that they don’t need one or that companies don’t really honor trial offers, they don’t know what they’re doing. And ultimately, if you think there is some chance that they might come through, apply with them and also apply with an agent who can produce a trial offer, and do it concurrently. Simply let the agents know that it is your intention to accept the best offer after underwriting. That’s fair. Smart too.

Bottom line. The life insurance industry has it’s share of slime balls and their favorite sport is bait and switch. You now have the ultimate weapon for stopping them before they can get you to join their game. Do you want a low quote or an honest quote? Do you want the policy to be approved with no surprises? Do you want to deal with an honest life insurance agent? You decide the game you’re going to play.