*Major* Dilemma, Need Some Serious Advice!

[FortHoodTX]

Hello all, new to the forum! Texas insurance agent here for the last 4½ years, servicing mainly retiring military here at Fort Hood. I'll try to be concise.

My friend is a bankruptcy attorney in Harris County. Sometimes her clients make too MUCH money so they need to spend it elsewhere for a few months until the bankruptcy case clears (3-6 months max). She advises them to go buy life insurance. Works like a charm.

She has offered to send these clients to me. 2-10 per month, they need to spend anywhere from $50-500/mo on insurance. Sounds great on the surface, but these are contracts I know are going to drop off within 6 months. I don't want to create a bad reputation for myself with my company (who treats me very well and with whom I have a very high contract %). I take 9-month advances currently and we all know how that would be a financial disaster in the long run if I wrote bad business.

What would you do?

—Refuse the business entirely
—Start taking 3-month advances instead of 9
—Get an appt with a company totally outside of my current one and make quick money on 3-month advances without caring how many contracts drop off? (I'd probably take a huge pay cut, contract would be much lower, likely couldn't write quick eApps via phone like I do now.)
—something else?

If these were quality life insurance clients, I'd be golden... but they're really my attorney's clients who just need to spend some disposable income somewhere for a few months.

Hopefully some experienced agents can help me out with this because I'm lost in the sauce and have no idea what to do. Thanks so much.

 

[STIBROKER]

—Refuse the business entirely
—Start taking 3-month advances instead of 9
—Get an appt with a company totally outside of my current one and make quick money on 3-month advances without caring how many contracts drop off? (I'd probably take a huge pay cut, contract would be much lower, likely couldn't write quick eApps via phone like I do now.)
—something else?

do it as earned and spread around to several company's.....

 

[xrac]

Hello all, new to the forum! Texas insurance agent here for the last 4½ years, servicing mainly retiring military here at Fort Hood. I'll try to be concise.

My friend is a bankruptcy attorney. Sometimes her clients make too MUCH money so they need to spend it elsewhere for a few months until the bankruptcy case clears (3-6 months max). She advises them to go buy life insurance. Works like a charm.

She has offered to send these clients to me. 2-10 per month, they need to spend anywhere from $50-500/mo on insurance. Sounds great on the surface, but these are contracts I know are going to drop off within 6 months. I don't want to create a bad reputation for myself with my company (who treats me very well and with whom I have a very high contract %). I take 9-month advances currently and we all know how that would be a financial disaster in the long run if I wrote bad business.

What would you do?

—Refuse the business entirely
—Start taking 3-month advances instead of 9
—Get an appt with a company totally outside of my current one and make quick money on 3-month advances without caring how many contracts drop off? (I'd probably take a huge pay cut, contract would be much lower, likely couldn't write quick eApps via phone like I do now.)
—something else?

If these were quality life insurance clients, I'd be golden... but they're really my attorney's clients who just need to spend some disposable income somewhere for a few months.

Hopefully some experienced agents can help me out with this because I'm lost in the sauce and have no idea what to do. Thanks so much.

I would write it with a different carrier and do as earned.

 

[LGilmore]

eeeehhhhhhhh (deep sigh) Yes, it sounds like easy money, but at the same time it sounds like a problem where if you get screwed, nobody cares....

You are right, if you carrier detects a pattern, you're probably toast. And you should know there is really nothing you can "hide" in insurance from companies, it's just a matter if they care or not.

You're also considering something where your friend is trying to fool the courts.... If the courts catches on, what happens to you for going along with what appears to be a way to fool the legal system. How do you think the system will react?

I know it's a tough one, but I'd probably pass on this deal. I mean it might work for years and years, cept that one time. It only takes one time, to do time. And outside your mom, nobody cares what happens to an insurance agent.

edit: I read the other replies and just want to clarify.. the reason the lawyer is suggesting premium payments is to show the courts the clients expenses.. after the case clears, they dump this premium and have it as disposable income.... Do any of you guys think the courts wouldn't slap the crap out of you as an agent if you were part of this? This is being done to deceive the court. BAD THINGS man, if you f with the court... again, nobody cares about an insurance agent and even less about one involved in from first glance appears to be a scam of the courts AND towards carriers... Just saying, walk away from it. Prison time is never worth commission.

 

[GoCubsGo]

I'd use the time you would have wasted on them and find clients you can actually make some money with.

I guess if you had very little better to do right now or really need the cash flow then maybe. Maybe take the money and use it to buy leads that can turn into real clients.

DON'T pay her anything. Can't see how it could bite you in the ass with the courts then.

 

[xrac]

I'd use the time you would have wasted on them and find clients you can actually make some money with.

I guess if you had very little better to do right now or really need the cash flow then maybe. Maybe take the money and use it to buy leads that can turn into real clients.

DON'T pay her anything. Can't see how it could bite you in the ass with the courts then.

The people practicing fraud in this case are the attorney and the client. I do not think the agent is doing anything inappropriate. He is just selling what the client wants to buy.

 

[STIBROKER]

did not say it was right.....but.....would give it a try but with a twist and talk the client into keeping it because this deal can not go down if they already have the proper life coverage.....so if they dont...sale...if they do replace.......

 

[WCMason]

The people practicing fraud in this case are the attorney and the client. I do not think the agent is doing anything inappropriate. He is just selling what the client wants to buy.

Seems like the government may be able to make a case that the agent participated in the fraud. Once the pattern is set he'd have a challenge convincing the court he did not know what was going on.

 

[djs]

You've got a different problem.....
How many insurance carriers will write a $500 premium a month policy without checking financials? Entering bankruptcy will be a decline anyway, so it probably won't get issued.

$50 a month, maybe.

The best part of this for you is as the policy to hide money rolls off the books, you might be able to sell them a lower cost policy to replace it with. It would build a pipeline, just not sure the pipeline is worthwhile.

Dan

 

[houcoogster]

I think you have been given good advice from the insurance perspective. Now you should go to a law forum or talk to a criminal defense lawyer in your state and ask him/her if this is legal for you to do. It could be a totally legal loop hole for all we know.