The only reason a sane life insurance agent would quote ING Reliastar, aka Reliastar, aka Voya, is compensation. Understand that there are two, sometimes more, levels of compensation that life insurance companies offer. One is called the “street” level commission which is what most of us get. Generally speaking on a 20 year term life insurance policy the agent would get somewhere between 75% and 85% of the first year premium, so on a $1000 premium I would receive $750 to $850 the first year. After that, on term life insurance, if there is any renewal commission, and it would be rare if there were, would likely be 1%. In most cases there is no ongoing commission stream on term life insurance.

Agents like myself generally work through BGA’s or brokerage general agents and they get a cut from each case from the life insurance company. There are some BGA’s who will share their cut of the money with the agent as a way to recruit agents into their organization. I fell for that once and found out why they needed to recruit agents instead of agents just choosing to come to them. I went back to my original BGA and have found their expertise in helping me place tough cases more than offsets any need for additional compensation. It really all comes down to doing the best thing for the customer. If I come through with the value and product they wanted I place the case and get paid. If I don’t I don’t.

The third level belongs to the big on line agencies. Zander Insurance isn’t all that big, but the company right now offering the biggest bonuses is ING Voyastar, and that is the only reason that Zander has to faithfully quote and try to sell them. I’m working with a couple of Zander almost clients who wanted to see if they could do better than the ING life insurance quotes Zander gave them. I got all of their medical information and quoted the best rates they would qualify for. ING came in at number 14  compared to one of the clients and number 12 on the other. There’s a lot of money left on the table by a client who takes the 14th or 12th best rates as opposed to the 1st or 2nd best rates.

Got off track there. So big on line agencies like Selectquote, Reliaquote, Zander and the rest get a pretty good compensation level because of their volume, on a 20 year term usually 95% to 105%. Then if they write a lot of business with a company that offers a bonus, at the end of the year they could see a 30% to 40% bonus. Do the math and think like a greedy American and you can see why companies would quote ING over companies with better underwriting, products, service and prices. And what’s good for the agency is generally not good for the customer. A couple came to me from Zander with approved ING policies, both at standard life insurance rate classes. Zander didn’t try to get them a better rate with another company. I was able to get them both preferred plus rates through another company, saving the collectively $39,000 over their term of insurance.

Bottom line. Not all on line agencies fold to the pressure of bonuses, but most do. Very few on line agencies offer good customer service during and after the application, but most independent agents do. If you have had a bad experience with an agent or agency where you truly didn’t feel your best interests were being served, call or email me directly. My name is Ed Hinerman. Let’s talk.

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