No, that’s not a typo. When it comes to business life insurance and insurance for people with high net worth, spending up to hundreds of thousands a year on life insurance is really not that uncommon. And anytime you are buying life insurance what you spend is very much in the hands of the agent and the company that you choose to deal with. Life Insurance dirty little secret! Most life insurance agents will make the most money they can out of a small case by recommending a product or a company that might not be your best deal. And if they think there is potentially large amounts of money at stake they will attempt to suck the marrow out of your bank account, life insurance ethics and good conscience aside. I’m serious! I know the life insurance industry is known for its’ integrity and professionalism, but let’s look at some ways some of our less than scrupulous representatives can take advantage of you.
1. Most life insurance agents break down your case into three parts once they’ve interviewed you. A. How desperate are you for the life insurance? B. How can I leverage that need in my favor? and C. How much commission am I going to make? Actually most agents think about #3 first.
2. If you present an impairment the life insurance agent will A. Ignore it even if you spoon feed them the relevant information to quote correctly. B. Quote without shopping your information, a fool’s approach with impaired risks or C. Immediately try to talk you into guaranteed issue life insurance because they don’t know how to get you approved through traditional companies.
3. Based on those initial criteria they will generally take three more steps. A. They will quote you a product and company that has the highest level of compensation or B. They will quote a product that is compensation heavy although it may not be appropriate and C. They will quote a price that may not be realistic, but is low enough to get you to ignore competition.
4. No matter how you describe your life insurance need, they will A. Quote the longest available product because it generates more premium or B. Quote a cash value product because even though the cash value doesn’t help you, it generates higher premiums and commissions and C. Ignore your tendency to want a shorter term product even if you present a short term need.
5. And when your approved policy is at a higher cost than you were quoted they A. Remind you that it was only their educated guess based on what you told them and B. Now that you’ve been approved you likely won’t be able to get a better rate someplace else and C. Going to another company means starting all over
6. If you’re declined they never call you again.
Bottom line. Whether you’re spending $400 a year for your life insurance or $400,000, suffice it to say there is good reason to be somewhat discerning about who you pick to help you. We just got approval today on a policy that will save the CEO of a company $40,000 on his annual life insurance bill. Here’s the thing. The chump life insurance agent that was servicing his current policy was content to let it ride and suck him dry while filling up his bank account. That’s no way to treat customers. If you can’t make a living keeping the best deal in your client’s hands, you should get out of our industry. If you have questions or need information, call or email me directly. My name is Ed Hinerman. Let’s talk.