Social Security Direct Express Debit MasterCard

[The Admiral]

According to the FDIC, one in 13 households were "unbanked" in 2013 or about 7.7% of households in the US. Additionally, 20% of households were "underbanked" meaning they had a bank account but used alternate financial services, outside of banks, for money orders, check cashing services, etc. As we in the Final Expense market know, many of these folks rely on the Direct Express Debit Card to receive their Social Security and/or Supplemental Security Income benefits.

Would appreciate any feedback from forum members for:

1. What percentage of your clientele uses Direct Express for drafting final expense premiums?

2. Have you increased your commission income as a result of carriers offering this drafting option?

3. How does your Placement and Persistency compare between drafting from a bank or savings account with drafting from a Direct Express card?

4. What carrier(s) do you feel do the best job of drafting premiums from Direct Express cards on the day SS/SSI benefits are deposited?

 

[Bcrane0305]

According to the FDIC, one in 13 households were "unbanked" in 2013 or about 7.7% of households in the US. Additionally, 20% of households were "underbanked" meaning they had a bank account but used alternate financial services, outside of banks, for money orders, check cashing services, etc. As we in the Final Expense market know, many of these folks rely on the Direct Express Debit Card to receive their Social Security and/or Supplemental Security Income benefits.

Would appreciate any feedback from forum members for:

1. What percentage of your clientele uses Direct Express for drafting final expense premiums?

2. Have you increased your commission income as a result of carriers offering this drafting option?

3. How does your Placement and Persistency compare between drafting from a bank or savings account with drafting from a Direct Express card?

4. What carrier(s) do you feel do the best job of drafting premiums from Direct Express cards on the day SS/SSI benefits are deposited?

IMHO always write it and it will pay down chargebacks, debit balances Ect . The odds of it getting through the first year I would say are slim. trans does a good job. They get to the money asap.

 

[jdeasy]

1. I don't track that but I've got quite a bit of DE business. Maybe 10%?

2. Doubtful, but possibly. Since I don't write direct monthly bill as a rule it has taken the no account objection away.

3. I see no difference in persistency between the DE payers and the checking account payers.

4. Trinity/FBL does the best job. And 2nd place ain't even close.

 

[Rearden]

1) I am processing between 10% and 15% of my business as "unbanked" business -- DirectExpress, NetSpend, etc. I am seeing about the same percentage as I have over the past year or two.

2) Yes; saw the biggest jump when I added 5-Star (my first unbanked draft option carrier) about 2.5 years ago. Agents definitely need a carrier that will take these cards, as he will pass up on all sorts of sales opportunities if he doesn't.

3) Unbanked business is unbanked for a reason; they cannot or will not do the most basic in financial management... they owe the bank(s) money on negative balances that they incurred because of overdrafts... they have always been "cash and carry" types and were forced to open an account due to the Goobermint requiring it.

Basically, the unbanked are a lower-quality category of customer than one with a checking or savings account, resulting in lower-than-average persistency. This is evidenced by the almost complete elimination of advancing options for unbanked clients over the past 12 months, save for a few carriers.

4) They all do a so-so job, with many commenting that Trinity/Family Benefit doing it the best. The key is to beat the prospect to the ATM on payday; if the carrier isn't committed to doing that, then it probably isn't worth the time offering the option to take unbanked business.

 

[John Galt]

1) I am processing between 10% and 15% of my business as "unbanked" business -- DirectExpress, NetSpend, etc. I am seeing about the same percentage as I have over the past year or two.

2) Yes; saw the biggest jump when I added 5-Star (my first unbanked draft option carrier) about 2.5 years ago. Agents definitely need a carrier that will take these cards, as he will pass up on all sorts of sales opportunities if he doesn't.

3) Unbanked business is unbanked for a reason; they cannot or will not do the most basic in financial management... they owe the bank(s) money on negative balances that they incurred because of overdrafts... they have always been "cash and carry" types and were forced to open an account due to the Goobermint requiring it.

Basically, the unbanked are a lower-quality category of customer than one with a checking or savings account, resulting in lower-than-average persistency. This is evidenced by the almost complete elimination of advancing options for unbanked clients over the past 12 months, save for a few carriers.

4) They all do a so-so job, with many commenting that Trinity/Family Benefit doing it the best. The key is to beat the prospect to the ATM on payday; if the carrier isn't committed to doing that, then it probably isn't worth the time offering the option to take unbanked business.

What sucks is you still have people with bank accounts that get paid on the 1st or 3rd and some of them even run to the bank to get their money. Soooooo, with that being said, I have noticed that Trans has a new SSB eft page that covers both de and checking and savings accounts and ties it to the benefit deposit date. Its a nice thought but unless it is micro managed it will fail. Even when you tie a checking account to the 2nd, 3rd or 4th Wednesday it can still nsf if the carrier is not on their game.

I am coming to the conclusion that working the right areas gets rid of a lot of de payers, but Ill still write them when I come across them, if nothing else to take as earned.

 

[Agentguy5]

What sucks is you still have people with bank accounts that get paid on the 1st or 3rd and some of them even run to the bank to get their money. Soooooo, with that being said, I have noticed that Trans has a new SSB eft page that covers both de and checking and savings accounts and ties it to the benefit deposit date. Its a nice thought but unless it is micro managed it will fail. Even when you tie a checking account to the 2nd, 3rd or 4th Wednesday it can still nsf if the carrier is not on their game.

I am coming to the conclusion that working the right areas gets rid of a lot of de payers, but Ill still write them when I come across them, if nothing else to take as earned.

I see a lot less DE payers when using DM leads than when using TM leads. Have you noticed a difference?

 

[Rearden]

What sucks is you still have people with bank accounts that get paid on the 1st or 3rd and some of them even run to the bank to get their money. Soooooo, with that being said, I have noticed that Trans has a new SSB eft page that covers both de and checking and savings accounts and ties it to the benefit deposit date. Its a nice thought but unless it is micro managed it will fail. Even when you tie a checking account to the 2nd, 3rd or 4th Wednesday it can still nsf if the carrier is not on their game.

I am coming to the conclusion that working the right areas gets rid of a lot of de payers, but Ill still write them when I come across them, if nothing else to take as earned.

DE usage is quasi-regional; the more urban/trashy an area, the more commonly you'll run into them.

Rural marketing yields less DirectExpress, in my experience.

 

[WholeLife]

DE usage is quasi-regional; the more urban/trashy an area, the more commonly you'll run into them.

Rural marketing yields less DirectExpress, in my experience.

Of the last 120 FE apps I have written, only one is DE. It's still on the books. I guess I'm in a good area, mostly rural.

 

[TwiLight]

Transamerica Update......

Well 3 months into using Transamerica for DE Cards and SocSec billing on ACH, I have not had one lapse/NSF.

I am totally surprised at this result.....

The True Test came in Feb and March 2015 with the 1st being on a Sunday and the deposits go in the previous Friday.

Guess what... We confirmed with a number of clients that the debit did in fact come out the previous Friday as it is supposed to.

I have had Trans Screw up basic ACH transactions countless times and am totally surprised that they seem to be getting the DE and SS Cycle billing correct.

Now if they could only stop the Snail mail on Notifications and go to email, I may be truly happy with them.

Skipper.

 

[peteybear]

I'm dking today and it's lunch and I've already wrote 3 trans.I find them easy to sell. I'll add americo and with trans,americo,aetna,snl and Gerber and maybe rna that covers the bases.