30 November 2012 0 Comments

The Blogger Vents

Life insurance agents and financial advisers should be honest, well informed and operate according to the golden rule.  Most of them meet these requirements.  But there are times when I encounter those who fall short in one or more of these areas.  In the hope that awareness might help you avoid costly mistakes, I’d like to share some of the less than professional traits that really irritate me.

I never sell that type of policy.  It’s a rip off”

This position ranges all the way from “Whole Life is a rip off,” to “Universal Life is lousy because it has no guarantees,” to “Term won’t be in force when you need it.”    However you read it, these blatant “there is only black and white” statements usually stem from ignorance or singular experiences that do not relate to the facts of the case in point.

The fact of the matter is that Whole Life still has a place.  Universal Life probably has the lowest priced long term death benefit guarantees of any policy available.  Term insurance premiums are the most affordable and therefore most likely to be maintained during the family growing years.   All policy types have a place.  Knowing when and how to use them in order to most efficiently fulfill a client’s needs is the responsibility of the true professional adviser.  The “I never sell.” response comes from a lazy, uninformed professional want-to-be.

Term is all I ever sell.  Since it can be renewed, why pay for more expensive policies?

This was a recent statement of one of my readers.  Have you seen what happens to term premiums during the renewable years after the original duration?  They go out of sight!  Term is great for many situations, but it is not a long range solution.

The bait and switch premium quote.

Some agents make no attempt to quote the correct premium based on an applicant’s medical/underwriting history.  They simply quote the lowest priced premium based on the age.  The epitome of this was from an agent with a direct marketing company I worked with many years ago who quoted a “Preferred-Best” premium class for a 240 pound, 5’2” diabetic woman with a history of alcohol abuse.

An agent using this tactic hopes that by moving the application and medical exam process to the next step, they will have a chance of making a sale at a much higher premium.

Well, I want to get all of my gripes out, but figure you’ve had enough for this reading, so my venting continues next.

Leave a Reply