Using 5-Star's TIA As a Marketing Tool.

[Jerard]

While writing up an app last Thursday it occurred to me that the Temporary Insurance Agreement could be used as a pretty good marketing tool. You know...they are covered from app date (assuming they get approved) and you can advance the 1st premium up to 60 days (PAC or CC). (BTW, last Thursday was Halloween and I would not recommend working in a full body pumpkin outfit...trust me on that.) Anyway....so that if you were to write an app today you could advance their 1st premium up to January 6th. And you still get paid upon issue.

So I wanted to talk about the problems that may arise with doing this. For example...with a 60 day advance they may forget about the policy...or you, for that matter. Has anyone done this, and, if so...what where your pros and cons?

I asked 5-Star about this and the guy I talked to was fine with it. Not sure what the DOI would say about it, though.

Any thoughts on "Yea, Dude....I can get you a free month or two..."?

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By the way...for those that don't know the procedure on this, I listed it below:

Temp Ins Procedure:

1) TIA page - Fill out as if live check (write in premium amount).

2) Check "yes" on app (temp ins question on page 4)

3) Fill in future draft date on "5-Star only" box (Example: 12042113)

4) Leave "Amount paid with application" blank on page 1

5) Go have a drink.



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[jdeasy]

The most I've gone out with them is 40 or 45 days. Only then when it was just a half to situation. Like writing it on the 22nd of the month and they want their draft to be on the 1st but not the next 1st.

5 Star has trouble enough drafting with 30 days. last you want to do with them is add a wrinkle to the situation.

I know they say to give the TIA and that authorization to draft is the same as getting money and I do as they say and give out the TIA. I have not had to test it and hope I never do.

Their claims process is terrible as it is now. In my opinion, of course. I know the company men IMO's disagree with me on that.

It's a tool you have with 5 Star. I would tend to not use that tool.

 

[VolAgent]

Since there is no coverage until there is premium, what happens if the person dies between you giving them the TIA and the first draft?

Do they try to draft and if it clears all is good? It sounds like a recipe for disaster unless someone can shed more light on it. I know you are just using it for marketing and the likelihood of there being a claim is small, but that one claim may ruin a few years of your life.

 

[GoCubsGo]

I would think that if I could only get someone to buy with the enticement of a free month that they would be a charge back in my future.

 

[Jerard]

Since there is no coverage until there is premium, what happens if the person dies between you giving them the TIA and the first draft?

Do they try to draft and if it clears all is good? It sounds like a recipe for disaster unless someone can shed more light on it. I know you are just using it for marketing and the likelihood of there being a claim is small, but that one claim may ruin a few years of your life.

They consider the voided check or a CC authorization the same way as a live check. So coverage starts from app date.

I would think that if I could only get someone to buy with the enticement of a free month that they would be a charge back in my future.

Good point. I hadn't thought of that.

 

[jdeasy]

Since there is no coverage until there is premium, what happens if the person dies between you giving them the TIA and the first draft?

Do they try to draft and if it clears all is good? It sounds like a recipe for disaster unless someone can shed more light on it. I know you are just using it for marketing and the likelihood of there being a claim is small, but that one claim may ruin a few years of your life.

They say it is a temporary insurance agreement and that they would pay if something happens to the applicant while they have the TIA.

Again, that's what they "say". Do you need to ask if I believe it?

 

[VolAgent]

They say it is a temporary insurance agreement and that they would pay if something happens to the applicant while they have the TIA.

Again, that's what they "say". Do you need to ask if I believe it?

I don't care if you do, I don't. One of the first rules of insurance is that consideration has to be received. There is no premium received, only permission to get it. What if the draft wouldn't have cleared?

It has problem written all over it.

The first mentor I had told me of cases where he took a check and gave conditional coverage. The person died while in underwriting but the check bounced.

Do you want to guess how much death benefit was paid out?

 

[jdeasy]

I don't care if you do, I don't. One of the first rules of insurance is that consideration has to be received. There is no premium received, only permission to get it. What if the draft wouldn't have cleared?

It has problem written all over it.

The first mentor I had told me of cases where he took a check and gave conditional coverage. The person died while in underwriting but the check bounced.

Do you want to guess how much death benefit was paid out?

We are in agrement. But they say that they have paid on the TIA. Foresters has the TIA on their term products. They also say thay have had to pay claims because of it.

I don't believe either one of them.

 

[VolAgent]

We are in agrement. But they say that they have paid on the TIA. Foresters has the TIA on their term products. They also say thay have had to pay claims because of it.

I don't believe either one of them.

Oh, I believe they will pay if they got premium, assuming the person qualified. That happens all day every day. But I don't believe they will pay if they haven't received premium.

 

[jdeasy]

Oh, I believe they will pay if they got premium, assuming the person qualified. That happens all day every day. But I don't believe they will pay if they haven't received premium.

They say they have paid without receiving premium. I'm not saying I believe them. The Foresters guy told a roomful of agents that they have paid on the TIA. Even after being questioned on it and being met with disbelief he stuck to his story. They wouldn't let us give the TIA for certain ages or face amounts.

Chase used to have the TIA and they claimed they would pay.

I'm glad I've been in the situation to test it.