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Watch Out For The Bait And Switch
This section may make some people angry with me because it's somewhat of an insurance industry secret.
Thirty Years Ago...
Back in 1974, I was a new agent attempting to build a clientele. Many nights I would make phone calls from 6-8 PM (yes, I was the one who interrupted your dinner). My sales manager told me, "don't cover any details on the phone - just get the appointment." Once that was accomplished, he would then say, "don't cover too many details when you meet them - just get the application signed and set up the medical exam. We'll figure out the details later."
Well all this didn't make much sense (and I didn't get many appointments), but that's what I did. The method here was to "lock" the person into taking a physical or medically qualifying them to "see what we can do." In fact, that mentally locked the prospect to your company and ultimately to your suggested plan. Taking the time to have an exam is a commitment and no one wants to do it twice. The time factor from start to finish is 4-6 weeks.
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Same Game today...
Now let's fast-forward to today. Many Internet companies employ the same tactic. If you call an Internet company, you may be talking a telemarketer who is following a script. They are paid about $10 per hour and their goal is to quote you the best possible rate and get you to commit to take a medical exam. The impression left with the caller is "I can't promise, but you have a very good chance to get that low rate. That's the "bait." The "switch" comes below.
They say: "in order to determine your rate, you need to take an exam to know for sure." The prospect does exactly that and has committed mentally to the process. Six weeks pass and the call comes and they are told, "we tried for the best rate, but it just did not work out. The good news is the company made another offer (always higher) and I think you should take it." There's the "switch."
The prospect is now faced with three choices:
1. Do nothing and have no insurance.
2. Ask them to shop the case - the response most likely is "we've already done that" (whether true or not).
3. Go elsewhere and apply all over again, take a new exam and wait another 4-8 weeks.
4. Take the offered contract at a higher premium.
In most cases, number 4 is the choice. Who in their right mind wants to go through that again?
To avoid this mess, I suggest you talk to an experienced, licensed agent in your state and find out upfront where you will fit health-wise. They will have access to the proper underwriting guides to estimate correctly about 80-90% of the time.
I'm writing this in March 2006. Last week a man called me from Pennsylvania. He was shopping and was referred to us. He has sleep apnea, a condition most insurers run from. We have a couple of progressive companies that would consider him as possible standard risk assuming the sleep apnea was mild. He was told by another website that he could get a Preferred rate. Their rate was better than what I quoted. I told him he was getting scammed. He didn't believe me. No convincing was possible and he went on his way.
Obviously, I was annoyed since we lost him as a customer, but what really bothers me is that another person is being scammed by our industry. As many of you know, our industry doesn't have the greatest of reputations anyway and this was only adding one more log to the fire.
You can avoid this type of situation and sniff out the telemarketers. As I mentioned in a prior section, ask the representative to fax or email a copy of their individual (not the firm's license) license. From that you can see when they were originally licensed and determine if you want to proceed. If they balk and offer a their firm's license instead, they are probably not licensed. You should move on. Most states require if you discuss rates and plans with a caller, they must be licensed in the caller's state. No exceptions.
Why Do They Want My Address To Give Me A Quote?
One last important point to consider: If you are on a life insurance site, looking for quotes, it is not objectionable for a site to ask you for an email address and phone number. They may call or email you later on to ascertain interest. They will probably not circulate that information anywhere else other that to contact you once.
Here's what to watch out for: if you are on an unfamiliar site and it asks (prior to giving you a quote) for your address and other personal info, that site is probably not an insurance site. They are a "data mining" site and selling your information to agents that pay from $10-20 for your personal information. Many "insurance" websites make more money collecting and selling "leads," than actually selling the product. That information is sold to as many as five agents who will contact you and attempt to sell you something. You might as well pick up the phone book, as you have no idea who you are dealing with. Furthermore, you have no idea who else is buying your personal information.
I stress again, if a site asks for an email and phone number, that info is not of much benefit to anyone - anything beyond that is a potential problem. Once you get your quote and want to apply, then and only then is that additional information necessary in order to start the application process.
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