Insurance Agent Forum

[Tom Highway]

1. I will be calling some carriers to get their final answer, but today is a holiday and I can't get anyone on the phone

2. I realize this may be asking for a lapse of a policy and chargeback, but I want to get some answers about what would be best for the client.

It's turning out that more and more people I'm seeing who really see the need for and want Final Expense insurance are ready to get a policy, but they either a) don't have a checking account, b) don't want to do direct withdrawal of premiums, c) are using this as an excuse, or d) some combination of the three or other things not mentioned.

Anyway, I have several people who are ready to go and get their policy started, but they either want to pay by money order via a mailed bill every month or go to Walmart and get a cashier's check or something.

With most companies wanting auto-draft from checking accounts, what do you think I will find when I ask different companies how this can be handled?

What is your experience with working with people in this type of situation? Is it even worth fooling with if they don't have a checking account in the first place?

What other thoughts can you give me on this?

[Newby]

I write lots of monthly payment policies. I don't know of any that have fallen off the books.

I use Settlers Life for them. American Amicable also has monthly bill. All the preneed companies (Forethought, Monumental, etc.) do monthly bill.

One reason people like monthly bill is to pay ahead. If someone is on a 10-pay they see an end to the payments. A lot of my people will pay 2 or 3 payments each month to get it paid off quicker. With lifetime pay, people don't do that.

[Tom Highway]

Originally Posted by Newby

I write lots of monthly payment policies. I don't know of any that have fallen off the books.

I use Settlers Life for them. American Amicable also has monthly bill. All the preneed companies (Forethought, Monumental, etc.) do monthly bill.

One reason people like monthly bill is to pay ahead. If someone is on a 10-pay they see an end to the payments. A lot of my people will pay 2 or 3 payments each month to get it paid off quicker. With lifetime pay, people don't do that.

Great!! I have AmAm in my toolkit, looks like they'll be getting the nod! Thanks for your help!

[Texas Insurance Guy]

Newby is right on. I also use Settlers for monthly billing. Every final expense agent absolutely should have 1-2 carriers that can do monthly billing. Most carriers require quarterly for billing.

Tom another thing to keep in mind. A lot of these poeple who do not have checking accounts and do not want one will use prepaid debit cards (ie Money Box). They go cash their checks monthly or bi weekly at these places and its their routine. If the carrier cannot take debit cards as a monthly method of payment you may want to take a look at setting their prepaid card as a direct bank draft monthly. Most of the banks who issue these prepaid cards will have a routing # and each cardholder actually has an account number (call them to find out).
So if your carrier does not require a voided check you can set up the client as if it were a regular bank draft monthly. Its absolutely a way to keep them on monthly, just hammer them on loading it up every month on that date. But its easier then dealing with direct billing.

[TRK3031962]

You may also want to take into consideration the income level of the prospects you are seeing.
If your client does have a checking account but they balk at it being taken from their bank, remind them that if they were to suddenly get sick and have an extended stay at the hospital, that's one less thing on their mind to worry about, no lapsing.
Another thing to remember is that with a lot of companies, it is actually more expensive to do a monthly direct bill. Quarterly is more expensive also.

[SalemInsuranceGuy]

Originally Posted by TRK3031962

You may also want to take into consideration the income level of the prospects you are seeing.
If your client does have a checking account but they balk at it being taken from their bank, remind them that if they were to suddenly get sick and have an extended stay at the hospital, that's one less thing on their mind to worry about, no lapsing.
Another thing to remember is that with a lot of companies, it is actually more expensive to do a monthly direct bill. Quarterly is more expensive also.

I know quarterly direct bill was always my biggest lapse area. I didn't have many but the ones I did seemed to lapse the next quarter or two after the policy was issued. Not all but a high percentage of the people who wanted direct billing seemed to be bad money managers, always living paycheck to paycheck, and didn't have a checking account because they bounced too many checks in the past. The only business I really like to write today is a monthly bank draft or an annual direct.

A lot of the older clients however didn't like the idea of a company doing an auto bank draft, but when I explained the other option was annual most did the monthly bank draft and a few stroked an annual check.

[Newby]

The reason that people don't open checking accounts is not due to the costs. They have garnishments against them. If they open the checking account, money will be drafted out by court order from old landlords, back child support etc.

They won't tell you that, you just have to read between the lines. That is the majority of the no checking account people. They know it would be cheaper to open a checking account than to pay the additional premium.

Others just don't want ANYTHING or ANYONE attaching to their bank accounts.

Regardless of why, it's an option that some people insist on and will pay extra for.

[Tom Highway]

Originally Posted by Newby

The reason that people don't open checking accounts is not due to the costs. They have garnishments against them. If they open the checking account, money will be drafted out by court order from old landlords, back child support etc.

They won't tell you that, you just have to read between the lines. That is the majority of the no checking account people. They know it would be cheaper to open a checking account than to pay the additional premium.

Others just don't want ANYTHING or ANYONE attaching to their bank accounts.

Regardless of why, it's an option that some people insist on and will pay extra for.

Great posts, all - thank you!!

I don't know why she doesn't have a checking account and I don't think I'll be asking her. I do believe she truly sees the need for FE, but i know there's a chance her policy will lapse. This isn't a route I want to go, and I try every way I can to do the monthly direct draft, but some of you should see the line at the check cashing service at Walmart on Fridays! There are a LOT of people out there in this situation.

BTW, I know I did a good job of selling her, because she wants me to come write a policy for her daughter at 3:00 on Monday. Referral, baby!!