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:

  1. Do nothing and have no insurance.
  2. 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.”
  3. 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.
  4. 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

  1. 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.
  2. 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.
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