More Companies Selling Life Coverage Direct

[WinoBlues]

Everyone gets tons of spam everyday.
But it seems like over the last month I have
gotten more emails about purchasing life coverage
direct from the company than ever before.

Companies that I haven't seen doing this
before.
Mass Mutual, Met, United of Omaha,and the usual suspects.
Maybe I just haven't been paying attention.

A few thoughts.
Will it exceed sales by agents in the near future?
Will the public embrace it and see the agent as
expendable?
Most emails have been for final expense, GI, or term.
Easier to understand products for sure.

Are these products the same ones they give the agents
and brokers that sell for them?
The public has more options to buy than ever before.
Free enterprise.

How do other producers feel about this tread?

Shooter

Hey Shooter,

I love seeing all the TV commercials and spamming. Free advertising for me. I believe that those along with my own out reach help my phone ring. While not as good as a recent death in the family they put us and our products in the people's mind.

It also drives home the need to reach out and touch our clients. Or someone else will.

 

[dirtydiggler]

But if that's the reason, why don't they offer their best products that way? It's always sub-standard products that are priced very high (if the applicant is reasonably healthy) and often a 2-year waiting period.

I think they sell these products without the agents so they capture sales to healthy applicants who didn't understand that they are buying a substandard product. It's not the agent commission but the agent "teaching" the applicant what their best option is that costs them more money.

That's a good theory, but I think it's more so on easier underwriting. They are more liberal on who they accept and because of that they have to charge higher rates to make up for the amount of death claims. As a f2f agent we make decisions on whether or not someone should qualify based on health, meds, smoker, etc. Colonial Penn says screw it give everyone a 2 year waiting period so we don't have to underwrite the product and can pay a cc rep 10 bucks an hour to do this for us. If you offer underwritten products I don't think that system could work.

 

[Newby]

That's a good theory, but I think it's more so on easier underwriting. They are more liberal on who they accept and because of that they have to charge higher rates to make up for the amount of death claims. As a f2f agent we make decisions on whether or not someone should qualify based on health, meds, smoker, etc. Colonial Penn says screw it give everyone a 2 year waiting period so we don't have to underwrite the product and can pay a cc rep 10 bucks an hour to do this for us. If you offer underwritten products I don't think that system could work.

Yes but when the rates get closer to competitive, like MOO's product, it's not priced for only deathbed business. But if they let agents sell it, that's all they would get. By going direct to the public they are profiting from the public's ignorance.

 

[donamese]

I don't think it is as much as a cost savings to the carrier as one would think. Carriers pay commissions to agents, but those agents do the majority of the marketing for the company. To go direct, the company needs to get directly in the consumer's hands so they have to spend quite a bit more money in mail, tv, radio, magazines, etc.

If there is a cost savings I think it is on the backend where bad agents burn the companies. Persistency from rolled blocks, bad mortality from coaching/clean sheeting, debit balance defaulting, hitting particular niches which cause anti-selection.

 

[rjernigan]

I was President of a small traditional whole life insurance company in Texas. Spent 31 years there starting as a computer programmer and ending up as President. Now I am Marketing Director for another life company (Central Security Life). In my time as a home office executive we discussed many times the option of going to direct sales. We never did. The idea is to save costs by not having commissions. What we determined from others going down that path is that you end up spending about the same on advertising and contacting as you did on commissions and then you at the home office had to do the job previously done by the agent.

We never, and I still dont since I am now one, considered agents as a necessary evil.
Agents are business partners, as important to the success of the enterprise as anyone, more so in most cases.

As the internet allows companies to reduce costs and still be successful you will see more companies attempt to sell direct. It will mostly be on commodity type products (think simple and term), leaving the more complex products in the hands of agents.

 

[Cash]

Yes but when the rates get closer to competitive, like MOO's product, it's not priced for only deathbed business. But if they let agents sell it, that's all they would get. By going direct to the public they are profiting from the public's ignorance.

I'm sure they tried to sell the best products but found that it wasn't profitable.

The best products require medical exams and it is hard to push someone to do that through the mail.

----------

life insurance is a contract. Technology has not changed contracts.

Thus all the technological innovation the world will ever have will have an undersized impact on the insurance business.

 

[LGilmore]

I was President of a small traditional whole life insurance company in Texas. Spent 31 years there starting as a computer programmer and ending up as President. Now I am Marketing Director for another life company (Central Security Life). In my time as a home office executive we discussed many times the option of going to direct sales. We never did. The idea is to save costs by not having commissions. What we determined from others going down that path is that you end up spending about the same on advertising and contacting as you did on commissions and then you at the home office had to do the job previously done by the agent.

We never, and I still dont since I am now one, considered agents as a necessary evil.
Agents are business partners, as important to the success of the enterprise as anyone, more so in most cases.

As the internet allows companies to reduce costs and still be successful you will see more companies attempt to sell direct. It will mostly be on commodity type products (think simple and term), leaving the more complex products in the hands of agents.

But all it takes is a different person at the top and things change quickly. I started with NYL almost 30 years ago, NYLIC contract, respect for agents as business partners. Then a change at the top and within a few years the great purge began where NYL reduced it's existing agents by 2/3rds. The NYLIC contract was too good. Production rules changed like the weather.

It took 7 years to get my pension restored. So trust me, if the guy at the top doesn't respect agents, things change.

Cheers.

 

[agentjhc]

Have you ever wondered why?

Why?.......................

 

[Robert Barney]

I was President of a small traditional whole life insurance company in Texas. Spent 31 years there starting as a computer programmer and ending up as President. Now I am Marketing Director for another life company (Central Security Life). In my time as a home office executive we discussed many times the option of going to direct sales. We never did. The idea is to save costs by not having commissions. What we determined from others going down that path is that you end up spending about the same on advertising and contacting as you did on commissions and then you at the home office had to do the job previously done by the agent.

We never, and I still dont since I am now one, considered agents as a necessary evil.
Agents are business partners, as important to the success of the enterprise as anyone, more so in most cases.

As the internet allows companies to reduce costs and still be successful you will see more companies attempt to sell direct. It will mostly be on commodity type products (think simple and term), leaving the more complex products in the hands of agents.

As you can see from Gilmore's testimony, the real reason that agents are not liked by life companies is that there are evil people in those life companies who exist just to abuse agents.

Want proof? Gilmore has just told you he was abused, a victim of those heartless bastards. We all know Gilmore's testimony is unimpeachable.

Larry thanks for sharing. I personally know how difficult that must have been for you, given the way they put you through hell. Good luck with your ongoing recovery.

 

[LGilmore]

Do you feel better now Bob?

Do you think I was alone?

It's gotta feel good for you to get a shot in there every so often bob.... I guess you have more free time now since you're not growing your product all that much these days no?


Err ah Bob? Your post might make more sense if you included my response to the other guy's post. You deleted my response so you leave the reader hanging. Happy Days Bob. I figured you were in eastern Oregon right now. Guess you got away...