Insurance Agent Forum

[Survivor]

This may be a bit long, but I ask you to read through it because I'm in need of some advice.

I was recently hired by an insurance company that has what I would call aggressive in its hiring practices. So, with money saved up (and tickled that I could become something like an insurance agent so young), I left my steady job to try my hand at something I thought could make me a lot of money through commissions. I don't want to name the company that I'm a captive agent for, but I would like to describe my situation so those of you with experience in the insurance business can perhaps tell me if I'm in a good situation or need to look for another company.

I had very little face to face training, as the nearest office for this company is some distance away. Thus, I work from home much of the time which is sometimes difficult to explain to people. I paid for an online training program out of pocket, my exam "sitting fee" out of pocket, and license registration fee out of pocket. As I said, I'm a captive agent with really only one "good" policy with a few (limited) benefit levels to stand on. The other policies I would say are more suited to some one who just can't afford other insurance or are in horrible health as the benefits are arguably not worth the premiums. I can really only pitch to individuals as the group policies aren't really group policies and require each employee to take an appointment to discuss their premium and benefits (at no discount). It is more of a "Hey, can I try and sell all of your employees some insurance, and maybe save you money on taxes if a certain amount of them sign up." I'm not down talking my products, I would say it fits some folks needs, but then again, I just don't know what other companies are offering.

My commission schedule is generally as follows:
Lower age bracket: 200% first month, 90% third, 70% forth, 50%, then 10% there on out
Middle age bracket: 170% first month, then lower residuals
Older age bracket: 120% first month, then even lower residuals

Problem is, that schedule only applies when there is BANK DRAFT. If they don't do bank draft and instead opt for direct bill (which I'm finding many people prefer), the commission is only 30%, then some "piddily" little residuals. I've only been at this a couple weeks, and honestly had prepared myself by accepting that I probably wouldn't make any money the first month. Well, my little heart was broken when a deal that I had been working on that would have provided about $600 dollars in commission only provided $150 because the customer said, "If I have to do bank draft, I don't want it." I've found this to be the case with other prospects as well. Frankly, a 30% commission is usually not worth the time and gas I spend on prospecting and going to appointments.

I am given brochures, "pull tabs," and "under window wiper" fliers at no cost. The company will sell me signs to put out, if I choose to do so. I have put out a lot of fliers out, but due to ZERO response after hundreds of fliers have been put out I am beginning to question if some one would actually call about insurance advertised on a flier underneath their windshield wiper. I am given some telemarketer generated leads to work off of, but the majority of my leads are suppose to (have to if I am going to make it) come from my own lead production.

Have I got a pretty good things going for me, or do I need to look elsewhere?

BTW: If anyone has managed to deduce which company I represent, please do not broadcast the name to the forum as I'm not sure if I'm actually in a bad position or am just being a cry baby because this is just a difficult business.

Thanks.

[Krono]

Why so secretive?

I suggest you look for the company name using the search function. You will more than likely find a ton of info on them...especially if it is who I think it is...

[Survivor]

I'm "so secretive" because, since I'm new, I don't know if I'm getting screwed and taken advantage of or if I'm getting a square deal and just being a whiney baby.

[Winter]

What company are we talking about here?

Winter

[Survivor]

I've PMed you the answer Winter. As stated above, I don't want to bad mouth the company I work for unless I actually know I'm getting screwed. A search on the company shows a bad opinion here, however.

[Frank Stastny]

Originally Posted by Survivor

Problem is, that schedule only applies when there is BANK DRAFT. If they don't do bank draft and instead opt for direct bill (which I'm finding many people prefer), the commission is only 30%, then some "piddily" little residuals. I've only been at this a couple weeks, and honestly had prepared myself by accepting that I probably wouldn't make any money the first month. Well, my little heart was broken when a deal that I had been working on that would have provided about $600 dollars in commission only provided $150 because the customer said, "If I have to do bank draft, I don't want it." I've found this to be the case with other prospects as well.
Thanks.

I really can't offer an opinion about the situation you find yourself in since I only work in the senior market.

I can though, comment on the portion of your post shown above.

I experienced the same thing when I first started selling insurance. My problem was that when I mentioned "bank draft" I made it sound like I was
Apologizing for signing them up that way. As soon as they said they didn't want to I caved in. Boy was I green.

It needs to be handled like any other objection you receive. There are very positive reasons for some one to use bank draft. If they get sick the premium is paid. They don't run the risk of missing a payment because they are ill.

Premiums are kept lower because there is no admin fee in sending out statements or receiving payments. It is much more efficient and their premiums are always paid on time.

It is just like them writing a check every month only the bank does it for them. It does not allow the insurance company to "take money out of their account".

If you are not sure how bank draft works go to your bank and have them explain it to you. I have found that a lot of people have the wrong concept of what a bank draft is.

Today, all my clients are on bank draft. It really isn't that hard to "sell" once you have the facts and know how to "sell" it.

Good luck.

[GreenSky]

Originally Posted by Frank Stastny

I really can't offer an opinion about the situation you find yourself in since I only work in the senior market.

I can though, comment on the portion of your post shown above.

I experienced the same thing when I first started selling insurance. My problem was that when I mentioned "bank draft" I made it sound like I was
Apologizing for signing them up that way. As soon as they said they didn't want to I caved in. Boy was I green.

It needs to be handled like any other objection you receive. There are very positive reasons for some one to use bank draft. If they get sick the premium is paid. They don't run the risk of missing a payment because they are ill.

Premiums are kept lower because there is no admin fee in sending out statements or receiving payments. It is much more efficient and their premiums are always paid on time.

It is just like them writing a check every month only the bank does it for them. It does not allow the insurance company to "take money out of their account".

If you are not sure how bank draft works go to your bank and have them explain it to you. I have found that a lot of people have the wrong concept of what a bank draft is.

Today, all my clients are on bank draft. It really isn't that hard to "sell" once you have the facts and know how to "sell" it.

Good luck.

Frank - excellent point and one that I've forgotten. I too apologize for bank drafts when it really should be presented as a positive.

I can always learn from my elders.

Rick

[STIBROKER@AUSTIN.RR.COM]

Here lets make this simple....if you are working for UA or Health Market/mega life you are screwing people....if your co. is not on this site you need to go back to what you were doing....

Health Insurance, Medical Insurance, Individual Health Insurance Quotes

[senior-advisor-indiana]

I will guess UA.

[Survivor]

I didn't intend for this post to become a guessing game, but since everyone seems to already know, it is UA. Everyone seems to have a quite poor veiw of this company.

How exactly am I "screwing people" if I explain cost and explain benefits? I'm not asking this question to engage in debate, I seriously would like to know how this is "screwing" people. I am an ethical guy that absolutely HATES some one that takes advantage of others, so I really hate to think that by selling for UA I'm doing this myself. I know full well the limitations of the policies, and make this clear to my potential customers. My manager has told me not to get into too much detail during an appointment. I really looked at this as more of a sales technique than a means of concealment. Either way, I like to get into the details with folks because I don't like the idea of Mom and Dad taking little Suzie to see a physician only to find it's not covered when the claim is denied. Could some one suggest another company that will coddle me a bit that has policies that folks would be delighted to hear the details on?

Frank:
You have a very vaild point. When I encounter this objection, I try to explain, much in the same way you outlined above, why they should use bank draft. Problem is, I find that people have a general fear of bank draft or else like to count their expenses as they pay them. I understand a company's reasons for pushing bank draft, but I think I'm seeing too much of a disparity in my commissions if they opt for direct bill vs. draft. Either way you cut it, I wrote 6,000 in AP (assuming it stays in force for a year, of course) and I just can't see a reason for me to earn 75% less over method of payment. Are all companies like this, or is it more contained to UA and the like?

Thanks to all for the experienced insight.

[midwestbroker]

You may be an ethical person, and we are not looking to attack you personally. The company, however, is screwing people by selling them plans that "mirror" major medical and have all kinds of limitations.

This practice by UA, while not practiced by you, will reflect on to you since you are a representative of the company.

[Survivor]

Point taken and understood.

I'm trying to do some serious research now on these forums that I didn't do before.

Would some one be so kind as to point me in a good direction. I've spent the time and money getting licensed, so I don't want to just call it quits on this business just yet. I've got 2.5-3 months of expenses saved up before I have to start selling some of my stocks to pay the mortgage, so I need to slide into a better situation shortly (after more careful research this time of course).

[James]

Originally Posted by Survivor

Point taken and understood.

I'm trying to do some serious research now on these forums that I didn't do before.

Would some one be so kind as to point me in a good direction. I've spent the time and money getting licensed, so I don't want to just call it quits on this business just yet. I've got 2.5-3 months of expenses saved up before I have to start selling some of my stocks to pay the mortgage, so I need to slide into a better situation shortly (after more careful research this time of course).

Sell serious companies, you have Assurant, GR, BC, Aetna, Humana etc etc on the health side. Get out there and start doing B2B and cold calling! Sooner the better, sure you might make mistakes but sooner you start the sooner you get a good income coming in. What ever you do, don't allow anyone make it complicated, it isn't rocket science!

[STIBROKER@AUSTIN.RR.COM]

But if you are writing these plans on healthy people when they need to be in a major medical plan that is how....and even the few sick people I have sent them ended up with a watered down plan that was not worth the money and ended up putting them into the risk pool ....asamof even on UA site they state these are not major med plans and should be bought to supplement a major medical plan which is stupid......
United American Health Insurance
[COLOR=Red]"United American offers a variety of Hospital and Surgical expense plans for individuals and families. These plans are designed to supplement current health coverage or serve as basic coverage where cost or availability is an issue. [/COLOR]
[COLOR=Red]Some of our most popular limited benefit plans include:"[/COLOR]

Originally Posted by Survivor

How exactly am I "screwing people" if I explain cost and explain benefits?

[Alston]

Have you ever bought an off-off brand tape player?

The super cheap tape players have no rewind button. You have to turn the tape over and use the fast forward button. I'm sure that nothing on the box says that they have a rewind button, so legally they are covered. However, if most people who buy the product expect a rewind button and if most of those people are disappointed when they aren't able to find one, an unspoken promise is broken.

This is the situation with basic or hospital only policies and a lot of health insurance policies sold by off-off brand companies. There are assumptions that clients make. These assumptions are in the head of the buyer and may not be legally binding. People expect to have most of their bills paid by their insurance company if they have a major expense. No one reads the contract but they make these assumptions. I don't think you want to be the person who makes these unspoken promises if they are not going to be kept by your insurance company.

By the way, these policies aren't always priced lower than more substantial policies offered by good companies.

[Frank Stastny]

Originally Posted by Survivor

Frank:
You have a very vaild point. When I encounter this objection, I try to explain, much in the same way you outlined above, why they should use bank draft. Problem is, I find that people have a general fear of bank draft or else like to count their expenses as they pay them. I understand a company's reasons for pushing bank draft, but I think I'm seeing too much of a disparity in my commissions if they opt for direct bill vs. draft. Either way you cut it, I wrote 6,000 in AP (assuming it stays in force for a year, of course) and I just can't see a reason for me to earn 75% less over method of payment. Are all companies like this, or is it more contained to UA and the like?

I can only speak for the senior market. I find that the vast majority of companies I represent either strongly encourage agents, or require them to write apps with auto bank draft.

As I said, I had the same problem when I first started selling. Among other things I mentioned, I would tell them that I have everything possible paid by auto bank draft. I think that helped a little when I said that.

I have no trouble now signing them up on Automatic Bank Draft (ABD), in fact, a lot of them specifically ask if the premium can come right out of their checking account.

You might look and see if there is a difference in the premium between Direct Bill and ABD. If there is, ABD should be a few dollars less expensive.

If they are adamant about not signing up that way, you can always suggest they pay annually.

[K-Dub]

Some very good points that were explained in regards to ABD. When I talk with clients it's either they pay annually (most people can't) or Bank Draft! If they don't want bank draft it's because they probably have $50 at any given time in the bank and are not financially responsible! <---This is from my experience!

A couple of reasons for bank draft, 1) The odds of lapsing are a lot less! 2) The odds of canceling are a lot less!

When people object say what has already been said on this board, it's keeps the cost of your insurance down (less paper and postage), and you really won't have to worry about your policy lapsing.

Try this: Mr. Client, just about all insurance companies are doing away with paper bills monthly, it keeps the cost of insurance down for one, and you won't have to worry about your policy ever lapsing. 95% of my clients are utilizing auto bank draft, the other 5% are paying annually. If you ever want to change accounts in the future let me know, it's pretty simple and I'm just a phone call away.

You most likely will not get an objection! Good luck!

[GP32765]

Here is what I do:
Mr. Jones we set it up where your bank pays us every month. Instead of this: Mr. Jones we draft the money from your account every month. Is sounds much better the first way rather than saying we are going to take it from your account.

[TheSalesWolf]

Here's what you need to do.

Go back and get your old job or something similar. Tell United American to shove it. Use your license to get appointed with real insurance carriers.
(Blue Cross BLue Shield, United HealthCare, Assurant, etc... )

Start selling the health insurance on the side to your friends, family and referalls. Make sure it is something that you feel confident that you can do and then make the decision to get into insurance.

NEVER, NEVER, NEVER, NEVER, go captive to sell any health product. Any health product that makes you go CAPTIVE generally stinks.

[Expat]

Originally Posted by TheSalesWolf

NEVER, NEVER, NEVER, NEVER, go captive to sell any health product. Any health product that makes you go CAPTIVE generally stinks.

100% correct. The attachment is from the Texas Dept of Insurance Disciplinary Actions. July 2007

United American Insurance Company of McKinney
Order Number: 070569
Date of Order: 7/2/2007
Order Final In: July
Action Taken: $95,000 fine
Violation: Allegedly, through its agents, engaged in unfair and deceptive acts or practices in the marketing of Medicare supplement insurance policies; Allegedly misrepresented terms and conditions of an insurance policy

United American Insurance Company of McKinney
Order Number: 070570
Date of Order: 7/2/2007
Order Final In: July
Action Taken: $95,000 fine
Violation: Allegedly failed to establish required marketing procedures regarding Medicare supplement insurance; Allegedly modified policy form without approval; Allegedly failed to timely respond to requests for information from TDI