Watch Out For The Life Insurance Bait and Switch
Dave Frucella • May 5, 2017
Life Insurance Sales Tactics – The Bait & Switch
Watch Out for the Life Insurance Bait and Switch
How I was trained to sell life insurance in the early 1970s: I dialed the phone from 6:00–8:00 p.m. every night looking for potential customers. My sales manager told me, “Don’t cover any details—just get the appointment.” Once I set an appointment, my manager would say, “Don’t cover too many details—just get a signed application and schedule a medical exam.”
Those initial commitments represent classic sales training technique: A series of small “Yesses” leading to the final “Yes.” Saying “Yes” to an appointment and “Yes” to an application and “Yes” to a medical exam makes the last “Yes”—writing the check—seem less painful. In small steps, the customer is getting committed and invested in buying from you without even knowing it. The chances of the customer backing out get lower with each “Yes.”
The Bait: Tell You a Good Rate
The Bait and Switch when buying life insurance is alive and well today. Many Internet companies employ the same tactic. If you call for a quote, 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 taking a medical exam. The impression left with the caller is, “you have an excellent chance to get that low rate.
That’s the bait—the incremental promise of a secure life insurance policy to protect your family.
The Switch: They Can’t Get That Rate
Then comes the switch. After the medical exam, you wait several weeks to get the company’s quote for your insurance. And it will almost always be more than you were led to believe: “We tried to get the rate we discussed, but it just didn’t work out due to (x, y, or z). But I have good news—the company can get the policy we discussed at a different rate which I think you should take.” And that “different rate” is, of course, higher.
Now the frustrated customer has four choices:
- Do nothing and have no insurance.
- Ask the agent or salesperson to try to find a similar policy from a different company at a lower price. Answer: “We’ve looked, and this is the best we can do.”
- Go elsewhere and start the application process all over again: new appointment/interview, new application, and new medical exam—another 4-8 weeks of waiting with no insurance.
- Take the policy at the newer (higher) premium. You’ve already invested 1-2 months in the process, and the thought of doing it over again is not appealing. So you bite the bullet and write the check.
That same “bait and switch” technique is still going on in the life insurance industry today. If you get called by a “life insurance salesperson” you need first to determine if he or she is actually a licensed-in-your-state insurance professional—or a telemarketer being paid $10 per hour to collect contacts which are then sold to insurance brokers for “follow up.”
How to Avoid the Bait & Switch
- Ask anyone selling insurance to fax or email you their license to sell in your state. Not their company’s license— their personal license to sell life insurance. If they can’t or won’t, thank them for their call and hang up.
- Don’t give any “salesman” your contact information beyond your phone number and/or email address. That is, don’t give them your permanent address or family details if they say they need that to furnish you with a quote. They are likely “data mining”—collecting contact information to resell to insurance brokers.
Be wary. Deal only with insurance salespeople or web sites who treat you with respect.
Questions? Comments? Suggestions? 1-800-542-5530 – admin@americaquote.com
Best Life Insurance Companies: Who Are They? The answer to that question is: “it depends.” If you are a non-smoker in good health, you should see most of the following companies towards the top of any worthwhile spreadsheet. If not, you may want to move on. Over 1,000 companies sell term life insurance so the focus here is the highest-rated companies offering the lowest prices. The listed companies are committed to the term marketplace. From time to time, we see other carriers move into and soon after quickly move out of this arena. It’s tough to be profitable and the company needs to know what it’s doing. These carriers have demonstrated their expertise. The current low-priced non-smoker leaders are: American General Life Insurance Company Banner Life Insurance Company John Hancock Life Insurance Company Pacific Life Protective Life Pruco Life Insurance Company (Prudential) William Penn Life Insurance Company (NY only) For Alternate Tobacco Users (Cigar, Pipe and Chewers), John Hancock or Pruco usually can’t be beat. For cigarette smokers, American General and Banner are usually in the top bracket. For non-smokers with weight problems, prices are all over the board, but Pruco has very generous limits. Family history problems are covered on the “Underwriting Guidelines” page. Best Life Insurance Rates: Call for Help Now I’ve only hit the high points here and can’t cover every situation. There are other companies not listed above that we use in special situations. If you have any health or lifestyle issues, I recommend you talk with an experienced agent (who is licensed in your state). If you’re talking with someone with an Internet company, ask him or her to fax you a copy of his or her individual license to sell in your state (not the company’s license). That way you know you’re not just talking with a telemarketer. A telemarketer’s only goal is to get your application started, regardless of company or underwriting criteria. This may seem harsh, but it can save you thousands of dollars. Questions? Comments? Suggestions? 1-800-542-5530
Life insurance and life insurance underwriting are topics none of us like to think about much. But it’s a smart idea to have a policy. Today, the average funeral costs between $7,000 and $10,000, and you don’t want your family scrambling to come up with that money. Plus if anything happens with your house, car, […]
When the business of life insurance began in 1759 in Philadelphia to help Presbyterian widows and orphans, there were no confusions or differences between term life insurance vs whole life insurance. Today, once you start looking for life insurance, all of the terms, rates, percentages, and explanations can get very confusing. And it’s for this […]
Research shows that 40% of Americans don’t have any form of life insurance policy in place. Does this include you? Buying life insurance is a wise route to take. However, it’s all too easy to stray off course. Life insurance policies are designed to provide financial security to your loved ones upon your death. The […]
Research shows that 52% of Americans don’t get life insurance because they believe that it’s too expensive. However, there are many simple ways to find a cheaper life insurance policy — from using price comparison tools to giving up a dangerous hobby. Life insurance guarantees that your family will be provided for if you pass […]
This is Part 6 – You can start at the beginning – HERE «Part 5 Who Should Consider Buying A Universal Life Policy? Is Universal Life Insurance right for you? I have a problem when people call me and tell me they paying $50-100 per month for a Universal Life policy because they bought for […]
The Top Ten Life Insurance Questions We Are Asked Question 10 – What’s involved with buying a policy? Answer – There are many life insurance questions, but we’ll start with the application. It is a three-step process. First, there are forms to complete. Once that’s done, the paramedic will contact you to schedule your exam. The exam involves a health history along with a blood and urine specimen. The third part consists of the company contacting your doctor for your medical records. Once these details are done, the company will have a decision. Question 9 – How long does it take to get a policy? Answer – 4-6 weeks – can be sooner Question 8 – Does it cost me anything to apply? Answer – The company pays all the underwriting expenses. Your commitment is the time to take an exam. Question 7 – What is AmericaQuote’s recommendation as to which policy I should buy? Answer – We recommend buying the longest affordable rate guarantee from the highest-rated company. Question 6 – If my spouse and I apply together, can we get a discount? Answer – Not currently with most competitive carriers – the companies offered spouse discounts until about 2001. They found that practice to be unprofitable as rates continued to decline. A spousal rider is an option. Question 5 – What is AmericaQuote? How long have you been around? Answer – This is one of many good life insurance questions. Who are you dealing with? AmericaQuote was launched in 1996. AmericaQuote was the first interactive life insurance quotation service on the east coast and is the third-oldest insurance website on the Internet. We believe it is the most comprehensive life insurance web site on the entire Internet today. Of course, we’re prejudiced. Question 4 – How many companies do you represent? Answer – We keep the most competitive companies and plans in our database. It’s not necessary to show hundreds of company’s rates on the site, just the most competitive ones. Underwriting criteria is critical as it significantly affects the outcome. We don’t concern ourselves so much with a particular company’s health category. The key is knowing where you fit health-wise. Sometimes one company’s “Preferred” rate will be less expensive than another’s “Super-Preferred” rate. If you overshoot your estimation, the company and plan that is ultimately offered to you may not be best for your circumstance or pocketbook. We recommend you talk with an experienced agent, individually licensed in your state. If a company comes to the marketplace with a new low-cost product, we examine the company and its financial ratings before adding that product. Question 3 – Can I get a better deal elsewhere? Answer – The same policy in the same health category will have an equal premium, no matter where you buy it (even directly from the company). Your state regulates that. As mentioned above, to get the best price, first talk to an experienced agent, individually licensed in your state, who has access to several companies. They can assist in determining what health category you fit. Question 2 – How do I apply for the best rate? Answer – You don’t apply for a special rate; you apply for a policy. The company will let you know what health category you fit into and at what cost. Check out our Underwriting Guidelines page. The most asked question is: “If I apply and don’t qualify for the premium I’m expecting to pay, will the company make me another offer?" Answer – If you apply and for some reason don’t qualify for the health category you feel you deserve, the company will probably offer (assuming you’re insurable) you a different premium. You can accept or reject it. This, of course, can be frustrating if you think you fit in a better health category than the company is offering. Their rate also may be higher than a competing company in that same lower category. At that point, your offer would need to be shopped among other carriers. A realistic appraisal of your health before applying is critical to the right buying decision. This only covers some of the life insurance answers. There are probably fifty other life insurance questions one could ask. We have the answers and will be glad to discuss your situation if you wish. Questions? Comments? Suggestions? 1-800-542-5530
This is Part 5 – You can start at the beginning HERE About Your Universal Life Insurance Quote «Part 4 – Part 6» About Variable Life Insurance The concept is the same as above. Variable Life is a “bucket.” everything works the same with a major exception. In a Variable contract, you have more control […]
This is Part 4 – You can start at the beginning HERE Universal Life Insurance Guide & Information «Part 3 – Part 5» Back to 1980’s… The interest rate the company is paying you on your “bucket.” is the critical part. Let me digress for a minute back to the 1980’s and into the 1990’s […]
This is Part 3 – You can start at the beginning HERE Benefits & Failures of Universal Life Insurance «Part 2 – Part 4» “The Bucket” What I’m about to describe is the “chassis” of a Universal Life policy, whether a standard Universal Life contract, Variable Life or Indexed Universal Life. I want you to […]
This is Part 2 – You can start at the beginning HERE About Universal Life Insurance Policies History of Universal Life Insurance Over 40 years ago, I sat in a former employer’s class anxiously waiting for the product that was going to revolutionize the life insurance industry. It was called Universal Life. It was a […]
I'm going to give the conclusion of this painfully boring and very lengthy article: Don't buy a Universal Life policy (aka Flexible Premium Adjustable Life, Variable Life, Indexed or Equity Universal Life) if you don't understand the inner workings of the policy.
Because insurance premiums can vary widely (as much as 300-500%), you should always get quotes in writing from multiple respected companies. AmericaQuote represents America’s top insurance companies. When you fill out our Instant Life Insurance Quote form you will get multiple quotes from the companies that offer the best and
Are the companies you are comparing small subsidiaries of larger parent firms? This is a very important. Many large companies are forming alliances with smaller companies to sell specialty products, such as term and term-like insurance.
Which to Buy?
The insurance industry is second only to the legal industry in making things more complicated than they need to be. There are really just two kinds of life insurance: permanent and term. Variations of each type exist, but let’s define “Perm” and “Term” as a starting place.
How To Save Money When Switching Life Insurance Companies
One well-known insurance company has flooded the airwaves with this promise: “Give us 15 minutes and we may be able to save you 15 percent on your car insurance.”
I am drawing special attention to the phrase “Guaranteed Renewable” in life insurance contracts because it is easy to misinterpret. When heard in a TV commercial: “Our policies’ rates are guaranteed for the first 20 years and are guaranteed renewable thereafter to age 100”—or something similar.
When I fly out of Charlotte's airport, I don’t use valet parking. It’s convenient but very expensive. Instead, I leave my car in the inexpensive satellite lot and take a free shuttle to the terminal. One is easy and very expensive, the other is a little bit of trouble but less expensive.
My slow awakening may save you piles of money.
In 1974, I went to work for a major insurance company. They offered the usual package of benefits - health, dental and life insurance. They gave me one times my salary for free and I could buy up to four times additional