How often to policies get replaced?

[Newby]

Believe me, there are agencies that train their agents to be replacement artist from the beginning. He can't compete with the old plan, it is the cash in hand that is the draw. I have seen people double the premium they are paying in order to get $500-$600 cash in their pocket from the cash value of the old policy. If you will read through the forums you find posts of agents in this forum that brag about doing the same thing as "Twit"..

I agree. We have a local BL&C agency that I've seen too many horrible things over too many years and too many different agents to think that it's not the management that's the problem.
There is one out of Louisville, KY that clean sheeted Columbian for years until I think they finally lost their Columbian contract. Generally those agents doing that are broke and don't make it long term but when the agency is training them that way it's just a revolving door of new ones coming in right behind them.

 

[rousemark]

I agree. We have a local BL&C agency that I've seen too many horrible things over too many years and too many different agents to think that it's not the management that's the problem.
There is one out of Louisville, KY that clean sheeted Columbian for years until I think they finally lost their Columbian contract. Generally those agents doing that are broke and don't make it long term but when the agency is training them that way it's just a revolving door of new ones coming in right behind them.

When I started, I heard all that "ethical" stuff about no replacement and then my staff manager showed me how to do it. It seems what they really meant was that it was only unethical to for others to replace our company's policies. The reasoning was since we were the best company in the world, the client was always better off with our policy instead of that of some other company.

Among our group, we have soem that have indicated that they will pull out a low ball rate company to replace business with on the same companies they write in other cases.. Guess they think the client is always better off with them as their agent..

 

[Rearden]

Policy replacement is a function of:

1. How you sell. High pressure, low-pressure.
2. Captive versus Independent. One carrier versus multiple.

In the big picture, replacements don't happen often common enough to be a big problem.

For example, I've worked in areas with several well-known, highly-productive agents that write hundreds of apps yearly.

In all my years full-time in the business, I may have collectively run into the same agent no more than 10 separate times. And this was with me running 25 to 35 appointments weekly.

However, they can be problematic in select cases, which is enough for me to advise agents to judiciously select the carriers with the best overall value of coverage and pricing.

The key is to sell competitively-priced carriers and make sure your carrier's underwriting offers the best value of coverage.

Otherwise, you're setting yourself up as a target.

 

[shonceman]

If you're client has had a policy with you for 10 years, then this agent should definitely not have attempted to replace it.

I don't think it has anything to do with "training" though, but rather, it just sounds like this guy is a "bad apple"; as i can't imagine any agency/FMO/IMO etc. training their agents to engage in such a practice.

What I'm curious to know, is how would he even able to compete (price-wise) with a policy that's 10 years old?

That being said, If it was me, I wouldn't let him get away with that. I would definitely report him.

Like @rousemark said, the hook was the cash, not the price. And you may think agents aren't being trained to do it this way. But that's only because you've only met ethical managers! There's plenty that would throw their own mother under the bus to get a bigger commish!

I had her talked out of switching that same afternoon. Once I explained how contestability works, she realized she was taking a pretty big risk given her health conditions. We set up for me to go by and do a policy loan for her Monday to help the immediate need.

When I was there Monday, she told me she had talked to "Twit" that morning. She had been declined (as I expected), but amazingly enough, he had somebody else that would take her! Well, now I was really mad. I knew what he was going to do - write her a GI for the whole amount, but "justify" it to himself because he's helping her get some cash.

So, I set about calling the carriers and getting her bank drafts restarted. Besides my business, she also owned a couple small policies with other carriers that she'd had for several years. (Note that I had not replaced those, even though I could have.) When I called LH, we discovered that he had already sent in the surrender form! (Apparently "Twit" carries around a stack of LH surrender forms.) She said that she had given him clear instructions to not cancel her other policies until after she was approved. Now she was mad!

I was there about three hours getting her situation straight and making sure she understood everything. Before I left I looked her in the eye and said, "Now, Ms. "Client", if another agent ever comes by claiming to have something good for you, you're gonna call me before you do anything. Right?" She said she definitely would.

As far as reporting the guy, I have tried to report a slimy agent before. TX DOI told me they won't take action unless a client calls. I don't want to put her through that, and it's probably unnecessary. "Twit" will most likely be out of the business and vectored by the end of this year!

(BTW, she didn't end up taking the loan. She figured out another way to handle it.)

 

[Life Hawk]

As far as reporting the guy, I have tried to report a slimy agent before.

So it was you...

 

[FETalk]

Like @rousemark said, the hook was the cash, not the price. And you may think agents aren't being trained to do it this way. But that's only because you've only met ethical managers! There's plenty that would throw their own mother under the bus to get a bigger commish!

I had her talked out of switching that same afternoon. Once I explained how contestability works, she realized she was taking a pretty big risk given her health conditions. We set up for me to go by and do a policy loan for her Monday to help the immediate need.

When I was there Monday, she told me she had talked to "Twit" that morning. She had been declined (as I expected), but amazingly enough, he had somebody else that would take her! Well, now I was really mad. I knew what he was going to do - write her a GI for the whole amount, but "justify" it to himself because he's helping her get some cash.

So, I set about calling the carriers and getting her bank drafts restarted. Besides my business, she also owned a couple small policies with other carriers that she'd had for several years. (Note that I had not replaced those, even though I could have.) When I called LH, we discovered that he had already sent in the surrender form! (Apparently "Twit" carries around a stack of LH surrender forms.) She said that she had given him clear instructions to not cancel her other policies until after she was approved. Now she was mad!

I was there about three hours getting her situation straight and making sure she understood everything. Before I left I looked her in the eye and said, "Now, Ms. "Client", if another agent ever comes by claiming to have something good for you, you're gonna call me before you do anything. Right?" She said she definitely would.

As far as reporting the guy, I have tried to report a slimy agent before. TX DOI told me they won't take action unless a client calls. I don't want to put her through that, and it's probably unnecessary. "Twit" will most likely be out of the business and vectored by the end of this year!

(BTW, she didn't end up taking the loan. She figured out another way to handle it.)

I'm glad to hear that everything worked out!

 

[FETalk]

If the agent left the door wide open that HIS rate can be easily beat by enough that it's worth the extra savings then yes, he could be replaced again. That has not been my experience nor the experience of any skilled FE agent that I know of.

Now I have ran across agents replacing by clean sheeting and often lying on smoking. Those guys are scumbags and I will hang them as often as I can. But those guys are not the norm and they won't last long in the biz.

Any agent replacing a policy needs to be extra careful on his underwriting to make certain that he isn't going to getting ulcers if the person dies in the first two years.

I was in the field for 20 years. And it was COMMON for me to replace coverage. If they had the wrong type of insurance or had been clean sheeted or had a whole-life that was priced too high or had a waiting period, I'm going to show them their more attractive options just like I would hope someone would do for my mom. And I have RARELY had a contestible claim that did not go well. And never on a replacement policy.

Replacing policies is not a bad thing to do. IF it's to the advantage of the applicant AND if they cleanly qualify for what you are selling them. And you can come behind and try to replace mine all you want. You will have a really hard time if I did my job properly.

I have a lot of Lincoln Heritage (LH) Senior Life (SL) American Income Life (AIL) etc. in my area and so I would say that at least 50% of my business is replacements, reduced paid up etc. Additionally, I have never replaced or changed a policy where I didn't believe I was putting the client in a better situation. That's how drastically different the companies an independent agent has to offer.

So many wonderful opportunities out there. I love that there are Senior Life and Lincoln agents running around. Makes my job a lot easier!

Ha, Ha, that's a good one (last paragraph)!

 

[Life Hawk]

I tend to drool a little bit when someone tells me they have LH policy. It's a bad habit I know... but what is a guy supposed to do?

 

[rousemark]

I tend to drool a little bit when someone tells me they have LH policy. It's a bad habit I know... but what is a guy supposed to do?

Well, now your mask will catch the drool and you won't ruin the application.

 

[Life Hawk]

Well, now your mask will catch the drool and you won't ruin the replacement.

Fixed that for you.