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I had a call today from a couple who had stepped up to the plate a little over two years ago when they decided it was time to have a baby and they quit smoking.

Now these weren’t real serious cigarette smokers, maybe smoking one in the evening or if they were out with friends that smoked, but never even coming close to 1/2 pack a day or even a week. So, for them probably easier to walk away from that habit and get on with the business of becoming parents. They now have a nine month old child and recently applied through Dave Ramsey’s Zander Insurance for $500,000 term insurance policies.

The agent there recommended that they apply through ING Reliastar and quoted both of them preferred non smoking rates. They were a bit taken aback when both policies came back at ING’s select rate which is the equivalent of other company’s standard plus rates. The agent cited the reason for the increase being her build of 5’8, 210# and the fact that he had only been two years as a non smoker. This information was divulged to the agent up front and in fact the wife had admitted to being a social smoker (2-3 a week) up until just before she started trying to get pregnant. So, she was actually a non smoker for just over two years and the agent put on the application that she had never smoked.

By now everyone knows I’m not a fan of big on line agencies. I’ve been there and done that and know what kind of service they are capable of and it’s the reason I’m on my own now. Each customer gets my full attention at their pace and I put myself through the ringer to make sure that I quote accurately. I hate explaining to someone that nothing’s changed but the price is different. It never, never makes sense to a client.

And when it comes to on line agencies Zander isn’t even a big one, but they make the same kind of mistakes that are common to call center agencies. Too often clients are handled by agents who, through no fault of their own, have not yet figured out how to take all the variables and get to the best rate. The majority of online agency representatives are new to the job because it’s a high turnover stressful kind of place to work.

Back to the two clients. The husband was easy. Banner, Minnesota Life, Principal, West Coast and Nationwide all allow preferred rates with either one or two years as a non smoker. Banner had the best preferred non smoker rate and saved him $200 a year over the Zander ING approval. The wife, because of her post pregnancy weight was shopped and Minnesota Life came through with preferred rates saving her about $150 a year. This actually allowed them to get $600,000 of 30 year term insurance for $200 total less than $500,000 would have cost through Zander.

Bottom line. I’ve talked before about the difference between an independent agent and an independent agency. I am convinced that agencies put too much emphasis on cozy, compensation driven relationships with companies. I also think that because of the high turnover they are forced to put agents making client decisions on the line before they are ready.

Just an fyi. I was taken to task by a reader of my blog for taking on Dave Ramsey and his adamant stance about Zander being the only place he will recommend to buy insurance. No apologies. Dave’s organization, for which I have a lot of respect, has a network or attorneys and financial planners across the country that believe in the same financial end goals as he does. Why then doesn’t he have a network of life insurance agents who believe that life insurance is important but needs to only do the job and always be budgetable.