This article is an original article from January 5, 2009. It was written by Nick Perry.
You’re interested in health and/or life insurance – that’s what brought you here, right? Most of the time, people don’t read up on how this sort of stuff works just for a little light bedtime reading. Chances are, you’re shopping around for a new policy because you’re dissatisfied with your current coverage, your premiums, or perhaps you don’t have coverage and you’ve realized you need it. And, chances are, this isn’t the first website you’ve visited. If I’m right so far and you’ve been looking online for new insurance coverage, I think I have a pretty good idea of what your experience has been like.
You’ve put your gender, date of birth, and desired date of coverage into a website. Then you’ve been shown three or four plans, each with different premiums and levels of coverage. Even though these plans are backed by contracts which range anywhere from fifteen to a hundred pages in length, the only information you’re given about your options is summed up in three or four bullet points. Do you know exactly what these plans cover? No – at best, you know the office copay, deductible, out-of-pocket limit, coinsurance, and monthly premium. Let’s say you select one of these plans – now they ask you for more information. Height, weight, medical conditions, a few other personal questions, and contact information. Now the fun begins. If you’ve put this information into a carrier’s website, you might get one or two agents from that insurance company calling you to talk to you about what sort of coverage you want. If you’ve put this information into a website offering “Free Instant Quotes From All Major Carriers!!!” then you’re likely about to be in for a shock. That information is instantly sold to anywhere from one to twenty-five agents who will immediately jump on their phone to try to get at you first – you’ve just become a “hot lead,” not a “person” with a “family” who has “insurance needs.” Whether you used an insurance company’s website or a “quote warehouse,” you’ve got problems.
If you used an insurance company’s website, you’re going to be contacted by “captive agents.” Now I’ll give them credit, captive agents usually know their products inside and out. If you have an Aetna captive agent on the other end of the phone trying to sell you an Aetna policy, then he’s going to know just about everything there is to know about that policy. Problem is, he’s not going to know about what Golden Rule, Humana, Assurant, or anyone else has to offer, and he’s certainly not going to encourage you to find out. It’s sort of like going to buy a new car – the Ford salesman is going to try to sell you a Ford, and if he mentions a Chevrolet at all it’s just going to be to tell you how much better his products are. If you get an Aetna agent on one line and a Humana agent on the other, they’re both going to tell you that their policies are the best fit for you. More importantly, they’re not going to highlight the same things about their policies, meaning you’re not going to be able to make an informed and complete comparison. That’s why shopping the major carriers direct just doesn’t work – it results in you being forced to compare apples to oranges when what you really wanted was a banana, anyway.
Things are worse if you enter your information into a quote warehouse site. The agents that will contact you regarding these plans are agents that have bought your information as a “lead” from a website like www.prospectzone.com. More likely than not, your information was sold to at least three agents (sometimes, significantly more – up to twenty-five in some cases) who will all fall all over themselves to get to you before the others do. Then, knowing that there are other agents hitting their redial button, these agents go for the high-pressure quick close. Usually, this means putting you into the cheapest policy they can – the commission check might be lower, but it’s a volume game at this point – regardless of whether or not the benefits suit your needs. These agents assume that if they can quote you a cheaper premium than anyone else, then they’ll make the sale – the quality of the coverage is hardly even a concern! There’s no personal attention, there’s no comparison of policies, there’s no dedication to client service; there’s only trying to pressure you into the sale and, if you don’t feel comfortable buying right away, dumping you and moving on to the next lead that hits their email inbox.
There is one problem common to both of these scenarios, and it’s a big one. When you apply for health or life insurance, your application goes through what’s called an “underwriting process.” During this time, your application is evaluated to make sure the insurance company knows just what it’s getting into when they agree to insure you (this is also the time during which your premiums might be adjusted based on the level of risk you present to the company, or when certain conditions may be “ridered out” as uninsurable). One of the tools underwriters use to evaluate what level of risk you present to the company comes from information made available by the Medical Information Bureau. The MIB, according to their website, alerts its member insurance companies to omissions and fraud during the underwriting of life, health, and other types of insurance. One of the things that will show up in your MIB report is if you’ve ever been declined for health or life insurance coverage before. If you show a decline in your record, it becomes much more difficult for you to be considered an acceptable risk by the company with which you presently want to get insurance. Now, the quickest way for an agent to get a commission check is to get your application out of the door as quickly as possible. Sometimes, agents will send your application to multiple insurance companies at the same time just in case one or two don’t go through. The problem here is this: if these applications get declined, you’re going to have a much more difficult time getting health or life insurance. Since you’re just another “hot lead,” though, and not a person with a family and needs, that doesn’t matter – the goal here is to get your application out as quickly as possible and move on to the next target.
Now tell me: Do either of these scenarios sound like they’re going to result in you getting the policy that’s best suited to your needs? Do you think either scenario ends with you having an agent that remembers your name, your needs, and will still be there to help you in three months when you have a question about your policy?
You have another option – find your local independent agent! Now of course, I’m a little biased (after all, I’m hoping that when you go looking for that independent agent, you’ll find me), but things really are different when you go this route. Shopping for insurance becomes a stress-free, hassle-free experience. When you pick up the phone and call me, or send me an email, message me on Facebook, or even DM me on Twitter, our business is strictly between the two of us. Your information isn’t shared with other agents, sold to mailing lists, or put in some online database so that other people can see your private information. You’re not a lead, you’re not a deal, you’re not an appointment – you’re a client, and you’re someone whose health and life coverage I take personal responsibility for.
Your local independent agent has access to more than just one carrier – not like the captive agents that work directly for the major insurance companies. For instance, I currently offer products from Humana, Aetna, Assurant, Golden Rule, GTL, Imerica, Madison National, World Insurance, Genworth, Colorado Banker’s Life, and AIG, as well as a nifty standalone dental plan through AHCP. And guess what – I have no reason to sell one of these carriers over the other! That means you get a fair and balanced comparison of these major insurance companies and the policies that they offer with no hidden agenda. That also means that you get access to a LOT more options than you would have with a captive agent.
You also get the personal touch. If my email inbox filled up with fifty purchased “hot leads” a day and I called each and every one of them, there’s no way I could remember all the names of the people I called by the end of the day. By the end of the week, forget it! But when you contact your local independent agent directly, you have the chance to have an expert in your corner working for you, not for an insurance company. Now think about this: seven months down the line, when you have a question about your policy, who do you want to call? The giant call-center at the insurance company? The agent that bought your information and a hundred others online and forgot who you were the second his commission check came in? Or would you rather call your local independent agent who went over your policy with you, took the time to shop for you and, out of a sea of options, found the policy that best protects you and your family? The answer to this one should be obvious!
And remember a few paragraphs ago when we were talking about how each and every time your application is declined by an insurance company it gets harder and harder – and eventually impossible – for you to get coverage? Well, that’s only a problem when you deal with someone in a captive agency or someone who has a hundred phone calls to make by the end of the day. Your local agent, who works for you, can call the insurance company before sending your application in. I can call up an underwriter at any of my carriers, give them my agent ID, give them a little information and find out if that policy will be issued, issued with an increased premium, or cancelled. But since I can do that without giving away who is applying, if they tell me the application will be declined then I never even have to send it in. That means there’s no black mark on your MIB records, and that means you still have a chance to get coverage with another company.
There’s one more thing about having your own local independent agent, which almost makes the arrangement too good to be true. We’ve already discussed the fact that your local independent agent will be someone you have the chance to have a personal relationship with and who will always be available to help you with your policy questions. And we’ve already discussed the fact that this local independent agent works for you, not for the insurance company. And we’ve discussed the fact that with a local independent agent you can, at any time, pick up the phone or write an email and have an on-call expert to answer your insurance questions. But here’s the best part. Ready?
It’s all at no additional charge.
You can pay your insurance premiums and have a faceless company that doesn’t know who you are and what your situation is. You can pay your insurance premiums and have a “churn and burn” agent who is interested only in selling you a policy as fast as possible and moving on to the next mark. Or, for the same price, you can have a local independent agent working to protect your family 24/7. Your premiums are going to be the same in every case (and this is by law – insurance companies aren’t allowed to charge different premiums based on who you buy your policy from). The only difference is in the level of service and personalized attention you’ll receive.
Now, there are three ways to buy life and/or health insurance: direct from the company, online through a quote warehouse, or through your local independent agent. The price will be the same for all of them. Knowing what you now know, which one do you think is the right choice?
If you have any questions about using an independent agent, then please feel free to contact me using the contact form on this website or by calling me direct at 404-660-1020. I’m on call 24/7, so please don’t hesitate to get in touch!