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No Commission Buying - Another Fairy Tale


One agent's perspective on advertising by David Frucella.


As a marketer with a web site, we scour the Internet for new ideas to sell our products. I've come to the conclusion most marketing ideas are re-worked and re-packaged concepts that have been used a thousand times before. The concept of "low-or-no-commission" or "direct-to-consumer" life insurance buying is raising its ugly head on the Internet today. Some insurance companies actually compete with their own brokers with web sites promoting "direct from company to consumer - no commission buying." How's that for building broker loyalty!!

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OK, let's assume you don't care where you buy a policy, you want the lowest price, period. Fair enough? Here's some news. There is no difference between the prices you pay from a broker versus a "direct to consumer" or "low or no commission" seller. The key is the policy name. If you see a policy advertised on AmericaQuote and the same policy name on a "direct to consumer" insurance company site, check the policy name and price. The price of that policy will be the same whether you bought it from a broker or direct from the insurance company. What's the catch? It's simple - the insurance company is keeping the commission! True, no commissions are paid, so it is truly a "no commission" policy. But, you pay the same price. Go figure.

I received a call from a viewer in New Mexico who had locked onto a "direct to consumer" policy and was convinced we couldn't match the price. Of course, after checking the policy name more closely and checking the health category he was quoted, the cost was the same. He was looking at a health category he could not medically qualify for. Some "direct to consumer" sites will quote you the lowest (most difficult to qualify for) rate. Two months later, the actual rate comes in higher than the quote you expected. If you have questions where you fit, please call us before applying.

By the way, health categories are becoming the biggest problem in giving accurate quotes on the Internet. Some companies now have eight separate health categories. Twenty years ago, when we had only "smoker" and "non-smoker" rates. I could quote a policy out of a two-page rate book. Today, you need to have an MD degree and a computer to quote someone accurately.

Advertising is not always what it appears to be. Someone is always getting paid something for providing a service. Be sure you get what you pay for. Here's our opinion: if the prices are the same, buy from the company that gives you the best advice, period.

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Next: Page 11 - About Life Insurance Premium Guarantees - Trust Me - The Levies Will Hold

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