Protective Life and Costco

[WinoBlues]

I am a member of Costco and I have written Protective Life steady for many years.

Now not only is Costco insurance selling Protective term. Protective has created a lower cost proprietorial product for them that is much lower (per the quoter) than we can sell initially.

Thought?

 

[rousemark]

I am a member of Costco and I have written Protective Life steady for many years.

Now not only is Costco insurance selling Protective term. Protective has created a lower cost proprietorial product for them that is much lower (per the quoter) than we can sell initially.

Thought?

All the IAs should ban together, quit placing business with Protective and let them know why... Of course that probably won't happen.. Agents are known for cutting their own throats..

 

[DHK]

I don't understand the problem?

Lots of insurance companies have various discount services through employers, associations, etc. That doesn't (necessarily) stop agents from being productive.

Unless you're competing against it... I don't see the problem.

Many companies have multiple distribution channels - Mutual of Omaha, American National, Metlife & Walmart, NYL & AARP, etc.

It only affects you if you let it.

Companies wouldn't have been doing this... if there was a decent agent field force doing the job.

 

[WinoBlues]

I don't understand the problem?

Lots of insurance companies have various discount services through employers, associations, etc. That doesn't (necessarily) stop agents from being productive.

Unless you're competing against it... I don't see the problem.

Many companies have multiple distribution channels - Mutual of Omaha, American National, Metlife & Walmart, NYL & AARP, etc.

It only affects you if you let it.

Companies wouldn't have been doing this... if there was a decent agent field force doing the job.

>>Lots of insurance companies have various discount services through employers, associations, etc.

Numbers. I believe I read some where their membership is somewhere around 60 million. They are a force.

""Over the last few years, Costco has seen a noticeable increase in the number of new members. While the retailer added 2.3 million members in fiscal 2009, more than 4 million customers signed up in fiscal 2011. The retailer’s membership base saw a rise of 3 million in fiscal 2012 and another 4.2 million joined Costco in fiscal 2013. We believe that the rise in number of new membership signups in 2013 was driven by the sluggish economic growth, which has made the U.S. consumers more cost conscious. Apart from new membership signups, membership renewal rates also remained strong throughout last year. ""
Costco's Steady Growth To Continue In Q2 Fiscal 2014 - Forbes

>>Unless you're competing against it... I don't see the problem.

I do not believe it will affect me much, however, I am an older agent sitting on a larger book of clients. I am not a new agent knocking doors.

>>Unless you're competing against it... I don't see the problem.


>>Companies wouldn't have been doing this... if there was a decent agent field force doing the job.

I disagree. Companies are going to look at profits and margins. Agents are expensive.

 

[DavidHill76]

Lee,



This article should definitely be of interest to you.

If you have some time to take some notes, check this out.

Particularly the third section, I Quote:

The Company also has a third membership level, called the Executive Membership. In addition to offering all of the usual benefits, it allows members to purchase a variety of discounted consumer services (auto and homeowner insurance, auto buying, mortgage, refinancing, boat and RV loans, identity protection, personal check printing, and/or business services (business phone services, merchant credit card processing, health and dental insurance, payroll services, business check and forms printing, small-business 401(k) plans, small-business web sites ) at substantially reduced rates. Executive Members also receive a 2% annual reward (up to $750 beginning January 1, 2012) on most of their warehouse purchases. Executive Members pay an annual fee of $110.

I honestly wouldn't be surprised if there is some big money exchanging hands in backrooms somewhere in Washington.


What I also find interesting is Charles Munger being a board Member. He is also Vice Chairman of the board for Berkshire Hathaway, which we all know is captain'd by Warren Buffett . Which company does Buffett have a vested interest in? Torchmark.

There are also two board members who have tie-backs to Credit Suisse. And another board member, she is a high ranking exec at Lincoln National.


What I find really concerning is the fact that Facebook just made this happen.

Basically, you can select anyone to be your facebook profile's beneficiary. Seems harmless right now in 2015, but what about in 2036 when Facebook partners with Google (who, by this time, has a massive and competitive P&C business) to partner with Globe Life and basically have everyone who gets a facebook account pay for it and you get all kind of Executive features, like health insurance, P&C and Life Insurance?

 

[goillini52]

Lee,



This article should definitely be of interest to you.

If you have some time to take some notes, check this out.

Particularly the third section, I Quote:



I honestly wouldn't be surprised if there is some big money exchanging hands in backrooms somewhere in Washington.


What I also find interesting is Charles Munger being a board Member. He is also Vice Chairman of the board for Berkshire Hathaway, which we all know is captain'd by Warren Buffett . Which company does Buffett have a vested interest in? Torchmark.

There are also two board members who have tie-backs to Credit Suisse. And another board member, she is a high ranking exec at Lincoln National.


What I find really concerning is the fact that Facebook just made this happen.

Basically, you can select anyone to be your facebook profile's beneficiary. Seems harmless right now in 2015, but what about in 2036 when Facebook partners with Google (who, by this time, has a massive and competitive P&C business) to partner with Globe Life and basically have everyone who gets a facebook account pay for it and you get all kind of Executive features, like health insurance, P&C and Life Insurance?

It's truly amazing the # of companies Buffett has his hands in. I believe he's connected with 70 insurance companies. Even has 20% of Swiss RE. This is the 1st I've heard of him having anything to do with Torchmark. Are you saying that he does...or was that a question?

 

[Cash]

Buffett is going to retire and then die soon so I doubt this will matter much.

However, it is a bad jesture on the part of Protective. It would be funny to see this backfire on them. All it would take is a few IMO's to say "see ya!" It's not like any one company is that important in the term life areana.

However, what kind of person buys a 401k or life insurance from Costco?

I know some people that have sold stuff to Costco. What Costco does is find something nice that people want but is generally too expensive for all the cheapos. They then tell the manufacturer "hey we want to sell these in our stores but we need them cheaper." So the maker goes out to China and builds a one off product and then Costco makes it look like the real thing.

All that to say... There is a good chance whatever they sell in insurance or business services is somehow inferior to what we sell. Just like AARP, group life and disability, etc.

 

[scagnt83]

However, what kind of person buys a 401k or life insurance from Costco?

Last I heard they stopped offering the small business 401k to members. It wasnt with a big name vendor and it wasnt really all that much cheaper either.

I would like to see a specimen policy for that protective term policy they are going to sell and compare it to the normal one.

But I have known some white collar types who shopped the mortgage program they have... so you might be surprised. People look at Costco different than walmart or others.

 

[WinoBlues]

Last I heard they stopped offering the small business 401k to members. It wasnt with a big name vendor and it wasnt really all that much cheaper either.

I would like to see a specimen policy for that protective term policy they are going to sell and compare it to the normal one.

But I have known some white collar types who shopped the mortgage program they have... so you might be surprised. People look at Costco different than walmart or others.

That is my point. Middle America and small business owners. I remember people at NALU meeting popoing AL Williams and term insurance in general in the 80s, I also remember laughing at the thought that people would buy Insurance on the interweb thingy, after all Life Insurance has to be sold people do not buy it.

 

[briko3]

Last I heard they stopped offering the small business 401k to members. It wasnt with a big name vendor and it wasnt really all that much cheaper either.

I would like to see a specimen policy for that protective term policy they are going to sell and compare it to the normal one.

But I have known some white collar types who shopped the mortgage program they have... so you might be surprised. People look at Costco different than walmart or others.

It's a UL policy with a lower than normal premium for the first 5 years and then a higher than normal one for the next 15. I'm guessing that they're hoping people will only look at the initial premium.