Debit Routes - Independent Agent Review

[TripleH]

Our job as final expense producers is to get all of the information in-front of our clients and allow them to make and informed and educated decision. I just ran into a case where they had multiple debit agents come collect for their American National Policies that they have had over the years. They had 5 policies and to their astonishment, they have loans on the policies of $6,300.00!! (they knew they had loans, but not this substantial).

They told me a story of an agent they had who came by 4 months in a row and never turned in any of their cash, but due to their cash value keeping the policy inforce, they never knew about this till the insurance company had sent them letter in the mail stating they were months behind in payments and the agent was no longer with the company.

Bottom line - no matter how long your clients have had these policies or how good they look, do them the justice of calling the carrier and laying out the facts to them. A majority of these clients have loans on their policies and some of them will genuinely make monthly payments if they have a true social security carrier.

 

[bboman23]

There are hundreds of stories that I have heard from debit agents getting desperate and "using" the client's monthly premiums. You go collect them and make up some BS story about a notice they need to sign. They have no idea they are signing a premium loan form because they trust the agent since they see them each month. Then the agent pockets the money and turns in the loan form.

It is an easy process for an agent that wants to be shady.

I had situations where I would get caught up in conversation, collect the client's $200 CASH premium and completely FORGET to mark their payment book. When I would go out the next month, I would realize that I did not mark it. I would mark it at that time, but I could have easily just acted as if they DIDN'T pay and that $200 would have been mine.

I always educate a "debit" client of the risk they are taking. The book I collected was over $17,000/month in monthly premium and well over half of them had loans on the policies (done before I took the book over). That is the debit route for ya!

Good post and you should always get more information for them so they can make an educated decision.

 

[rousemark]

There are hundreds of stories that I have heard from debit agents getting desperate and "using" the client's monthly premiums. You go collect them and make up some BS story about a notice they need to sign. They have no idea they are signing a premium loan form because they trust the agent since they see them each month. Then the agent pockets the money and turns in the loan form.

It is an easy process for an agent that wants to be shady.

I had situations where I would get caught up in conversation, collect the client's $200 CASH premium and completely FORGET to mark their payment book. When I would go out the next month, I would realize that I did not mark it. I would mark it at that time, but I could have easily just acted as if they DIDN'T pay and that $200 would have been mine.

I always educate a "debit" client of the risk they are taking. The book I collected was over $17,000/month in monthly premium and well over half of them had loans on the policies (done before I took the book over). That is the debit route for ya!

Good post and you should always get more information for them so they can make an educated decision.

In defense of debit agents, they aren't the only that have to get a client "sign" a paper... take out a loan and keep the money... Or sell a policy, collect the initial premium and not send it in, don't leave anything behind by which they can be identified. Ordinary agents do it too...

 

[bboman23]

In defense of debit agents, they aren't the only that have to get a client "sign" a paper... take out a loan and keep the money... Or sell a policy, collect the initial premium and not send it in, don't leave anything behind by which they can be identified. Ordinary agents do it too...

I 100% agree, but most indy agents just stick with bank draft and don't collect money. Debit agents are collecting cash over 1/2 the time. I have seen some shady things from indy agents AND from debit agents. I just saw and heard about it much more as a debit agent.

Works both ways though. I have had clients swear they DID pay and they didn't. "Come back and see me Tuesday and I will have it for you."

I show up on Tuesday..."I paid you last week and you forgot to mark my book!"

 

[billyb]

I worked a debit with Liberty National for 12 years before I stupidly took a management position. I was not short one penny.

 

[tribetime32]

I'm not sure I've ran into a client with a debit agent that doesn't have a loan on their policy. It's also a challenge to get some of these folks a bank account also

 

[TripleH]

I'm not sure I've ran into a client with a debit agent that doesn't have a loan on their policy. It's also a challenge to get some of these folks a bank account also

Agreed! Only push forward after asking the discount questions

 

[TripleH]

I worked a debit with Liberty National for 12 years before I stupidly took a management position. I was not short one penny.

Good info

 

[shonceman]

You’ll want to be cautious if policies have loans that the client doesn’t remember taking out. That may mean they’ve missed premiums along the way. To keep them from lapsing the policy, their agent had them sign a loan to pay premiums. If they’re poor payers, you might be writing yourself a chargeback.

I’ve heard the horror stories, too, about agents forging signatures on loan forms, depositing loan checks into their own account, etc. But I haven’t encountered that in quite awhile. It’s much easier to catch these days, so agents don’t get away with it like they used to.

 

[shonceman]

I'm not sure I've ran into a client with a debit agent that doesn't have a loan on their policy. It's also a challenge to get some of these folks a bank account also

I’ve had debit clients borrow money for all kinds of reasons. They might need dental work, or a car repair, etc. I had one client who would take out a loan every year right before Christmas. Then she would start paying in it in January and have it all paid back by the time she needed the next Christmas loan. It was the debit version of a “Christmas Club” account!

My debit clients are all pretty aware of the availability of policy loans. Sometimes they even ask me during the presentation whether this is a policy you can “borrow against”. But I always try to talk them out of taking a loan if I can. I’m concerned that they understand the future ramifications of policy loans. Most agents don’t take the time to explain them, so you run into situations where small loans taken out years ago have accumulated so much interest that they’ve grown into a monster. The only time I recommend them is if a premium loan is the only way to salvage the policy.