- 4,306
What this Country Needs is Good Home Service Again
- Thread starter DayTimer
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- 4,306
The real beauty of the home service system is the power of relationships - I'm not a stranger. Even if I've never met somebody, they've probably seen me in the neighborhood. A few years ago I wrote life and renters insurance on a woman by cold canvass doorknock in an apartment complex where I have several customers. Then I wrote her 4 grown daughters and their children. Then I increased mom's coverage a couple years later. Last year I wrote her neighbor a small GI. A few months later I wrote the neighbor's mom. A few months after that I wrote her sister. The other day I wrote her cousin. Yesterday I wrote the cousin's daughter, husband and children. And on and on it goes.
That's how it works in Home Service. It's beautiful!
That's how it works in Home Service. It's beautiful!
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- #13
- 5,971
I didn't really leave FE though at first I thought I did. It took me about a year and half to figure it out, but I really have a very good idea of why I do what I am do, and that has given me such a strong, organized, comprehensive message to take to my clients and prospects.
You see, I believe each and every one of us who gets up every day and goes to work, and pays our taxes and plays by the rules ought to expect to earn a guaranteed retirement as a result of his or her efforts, a retirement that is free of financial hardship and worry.
However, for most Americans that will not happen without help from someone like me. The reason most Americans will fail to have the retirement of their dreams has largely been stated by you and @HoosierLife and others above: rampant consumerism and stagnant wages along with rising taxes and runaway inflation (the government may be able to hide it on paper but it is stripping wallets bare and the American people know it - have you bought a pound of bacon lately?) all of which cause most Americans to send almost 74 cents of every dollar they earn during their life time off to the government in the form of taxes, the credit card companies and the banksters and the Wall Street brokers in the form of interest and fees.
And then, once they do retire with whatever meager savings they did manage against all odds to keep for themselves, the primary beneficiary of their life's work is too often not themselves, but a hospital or a nursing home and yes, the government, rather than themselves and their family.
So what I do is I show folks how they can reduce and then eliminate their debt, recovering tens of thousands, and often hundreds of thousands of dollars that would otherwise have been transferred away from them to the government and the financial institutions. Having set them on the path to then show them that they can now save far more money far more quickly than they had ever thought possible so that they can live debt free and truly wealthy now and look forward to living retirement of their dreams in the future.
Everything I do is aimed at finding folks who want me to help them accomplish those goals using the guarantees and protection only we life insurance agents can provide. I do not help them with investments. I have partnered with a like-minded RIA who handles their mutual funds and bond funds and such. What I do is help them protect their family by helping them find the money they need to save to fund those investments. The primary tool I use for all this is max funded cash value whole life. Done correctly, such a policy will not only protect their family should they dies too soon, but will supplement their retirement income and provide a legacy death benefit, a very, very ,very small amount of which will pay for their final expenses.
I still sell simplified issue final expense life insurance. Some folks have reached a point in their life with regard to age and health where that is the best I can do for them. And it is a very, very important benefit to help them acquire for their families. We who sell final expense, whether as our main line of insurance or as part of a comprehensive insurance-based financial planning service do good work.
I am still working final expense, you see: But now, I am now trying to get to future final expense peeps earlier in life so that they don't become final expense peeps. I am also helping folks who still have time but do not have the ambition or income to do what is necessary to plan and prepare for retirement acquire whole life protection earlier in life so that when they do retire, that premium will be a much smaller percent of their income than it will be if they wait until they are 60+ years old to acquire it.
One last thought on this: When I first moved in my present direction, I was told and I thought that my ideal client was the 59 1/2 year old $150,000 or more/year earner with a seven figure 401(K). What I came to learn, largely about myself, is that my ideal client is a middle American family - blue or white collared - who would like to retire to a seven figure life-style but has no hope of getting there except by accident. I help these families plan and prepare so that they don't have to hope for an accidental windfall along the way.
In the end, we are all working final expense.
- 26,134
My people. Seems many agents are targeting the lower and upper income. Not very crowded in the middle
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- #15
- 5,971
It surely is. And what a tremendous contribution you make to those neighborhoods in which you serve. How many of those folks would have otherwise gone without protection until the mailers came in after their 50th birthday?
- 5,050
Heavily down, especially when you factor in that there are alot more licenses held by people that don't actually sell life. Today, many financial planners, bank investment people & office staff of agents & multi line agents hold a life license but don't actually sell life or only when someone asks them for it. Alot of people in investments & banking hold the license for annuities, not life
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- #17
- 5,971
They are not being served by our industry except for the mortgage protection mailers they get within the first 90 days of closing on their loan. At least they are not being served on a personal level. And Select Quote and Policy Genius and Lemonade cannot compete with us once we get face to face across the kitchen table.
That isn't to say there is not great resistance to letting us get face to face and across the kitchen table form one another. Life insurance has been under attack for as long as I have been alive. The key I have found is to prospect not by telling them what I do, but by asking them questions the answer to which makes them want to give me just 5 minutes or 10 minutes or 30 minutes ...
EDIT: And they are only targeting the lower income folks who send back mailers or fill in FB forms. That is a very, very small percentage of low income seniors.
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If I were younger and in better health I would seriously consider getting back in the debit business as an independent using Liberty Banks as my go to. They only pay about 75% first year but they pay a 40% renewal on collections after the first year. Plus they pay it even if you have it on bank draft or credit card. 40% is more than the old debit companies paid. Plus, if a policy lapses, you are not charged anything like the old debit companies charged you for lapses. And, the best part is you have not management team checking your shirt collar. I loved the rapport on the debit. I hated not being able to "fire" difficult clients.
- Thread starter
- #19
- 5,971
The RVP up here starts newly contracted agents at 70/35/15 ... all as earned. I sure do understand the appeal of taking that FYC cut to get those renewals. My persistency across my FE carriers is quite high, with a lot of policies now in years 3-5. In hindsight, having even half of those cases at LBL Home Service paying me a 35% renewal is the stuff hindsight dreams are made of
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- Thread starter
- #20
- 5,971
This is an example of what I mean when I say debit insurance has been under attack by the do-gooders.
From the New York Times, August 9, 1986 ...
"'If the life insurance industry is low technology, then the home service portion is no technology,'' said James B. Stradtner, managing director of Alex. Brown & Sons, a Baltimore-based securities firm that follows many of the companies in this business. ''But I don't think there is another mechanism available in the United States whereby the people who buy it would have insurance.''
FOR about 20 years, Martha Lacey of Bessemer, Ala., has been buying a form of life insurance known as industrial insurance. She holds several such policies with premiums paid on a weekly or monthly basis and says that she is pleased with both the product and the service.
''If you pay a yearly premium, it's too expensive,'' Mrs. Lacey said. ''I can pay $60 a month better than I can pay $700 at one time. Plus every agent I've had I really liked.''
But while Mrs. Lacey is an enthusiastic adherent of industrial insurance, others are just as strong in their condemnation of the concept. For example, Ron Sheffield, consumer affairs director of the Arkansas Insurance Department, calls it ''the most expensive form of insurance sold; the industry justification is 'we sold it to your grandmother, we sold it to your mother and we're going to sell it to you.' ''
The controversy over this marketing method, whose formal name is home service insurance, is longstanding. Although many of the policyholders who have acquired such policies are satisfied with their insurance protection, others have complained that they were not adequately informed about various elements of their coverage when purchasing insurance contracts.
Although there is no single, universally accepted definition of the category, home service insurance is essentially a system of delivery of an insurance product, typically with a low face value, to the consumer. Agents normally sell policies and collect premiums by going periodically to the homes of their customers, usually lower-income and middle-income families who often pay in cash. Much of the insurance, moreover, is written without a medical examination of the policyholder.
Two categories currently fall under the broad rubric of home service insurance: industrial insurance and monthly debit ordinary. Industrial insurance is defined by different laws in each state to describe policies with a limit of, say, $1,000, $2,000 or $2,500. Monthly debit ordinary policies, also sold by home service agents, generally provide somewhat larger death benefits of up to $5,000.
''Our companies are growing at a rate of about 10 percent a year,'' said G. Mason Connell Jr., president of the Life Insurers Conference, the trade association of the home service industry. ''We're particularly strong in the South and Southeast, from the Atlantic into Texas.''
''If the life insurance industry is low technology, then the home service portion is no technology,'' said James B. Stradtner, managing director of Alex. Brown & Sons, a Baltimore-based securities firm that follows many of the companies in this business. ''But I don't think there is another mechanism available in the United States whereby the people who buy it would have insurance.''
Because of its small face amounts and frequent premium payments, home service insurance costs more per unit than insurance sold through other means. Insurers say that their higher administrative and accounting expenses have to be passed along to policyholders, who would not otherwise buy insurance without this pay-as-you-go procedure.
However, critics charge that a number of problems are inherent in sales of home service insurance. For instance, the customer's premium receipt book - possibly his or her only proof that a premium has been paid - may not contain the same information as the agent's debit book, which serves as the company's payment record. The books themselves, designed to be used for up to seven years, go through a great deal of handling and sometimes might not represent an accurate record of the transactions between insured and insurer.
Another reported abuse in this business is overloading, or selling too many policies to one buyer in relation to his or her need or ability to pay. An individual household may very well have more than one policy, with additions and deletions made over the years that may not be completely understood by the public.
Mr. Sheffield said that he would recommend certain changes in his state's insurance laws, such as forbidding insurance companies to compute premiums on a weekly basis when collecting monthly, establishing larger minimum policy amounts and mandating understandable language in the data given consumers. Additional recommendations dealing with modifications in home service insurance procedures include creating standards for lapsing policies and limiting the total insurance that can be sold to a household this way.
''There is no reason why individuals should, because they are poor, uneducated or undereducated, be made to purchase a product that offers less dollar-for-dollar value than any product on the insurance market,'' Mr. Sheffield said. ''The industry should be required to make changes in their products to make them more of an economic benefit for the insureds.''
A version of this article appears in print on Aug. 9, 1986, Section 1, Page 30 of the National edition with the headline: YOUR MONEY; Home Service Insurance.
From the New York Times, August 9, 1986 ...
"'If the life insurance industry is low technology, then the home service portion is no technology,'' said James B. Stradtner, managing director of Alex. Brown & Sons, a Baltimore-based securities firm that follows many of the companies in this business. ''But I don't think there is another mechanism available in the United States whereby the people who buy it would have insurance.''
FOR about 20 years, Martha Lacey of Bessemer, Ala., has been buying a form of life insurance known as industrial insurance. She holds several such policies with premiums paid on a weekly or monthly basis and says that she is pleased with both the product and the service.
''If you pay a yearly premium, it's too expensive,'' Mrs. Lacey said. ''I can pay $60 a month better than I can pay $700 at one time. Plus every agent I've had I really liked.''
But while Mrs. Lacey is an enthusiastic adherent of industrial insurance, others are just as strong in their condemnation of the concept. For example, Ron Sheffield, consumer affairs director of the Arkansas Insurance Department, calls it ''the most expensive form of insurance sold; the industry justification is 'we sold it to your grandmother, we sold it to your mother and we're going to sell it to you.' ''
The controversy over this marketing method, whose formal name is home service insurance, is longstanding. Although many of the policyholders who have acquired such policies are satisfied with their insurance protection, others have complained that they were not adequately informed about various elements of their coverage when purchasing insurance contracts.
Although there is no single, universally accepted definition of the category, home service insurance is essentially a system of delivery of an insurance product, typically with a low face value, to the consumer. Agents normally sell policies and collect premiums by going periodically to the homes of their customers, usually lower-income and middle-income families who often pay in cash. Much of the insurance, moreover, is written without a medical examination of the policyholder.
Two categories currently fall under the broad rubric of home service insurance: industrial insurance and monthly debit ordinary. Industrial insurance is defined by different laws in each state to describe policies with a limit of, say, $1,000, $2,000 or $2,500. Monthly debit ordinary policies, also sold by home service agents, generally provide somewhat larger death benefits of up to $5,000.
''Our companies are growing at a rate of about 10 percent a year,'' said G. Mason Connell Jr., president of the Life Insurers Conference, the trade association of the home service industry. ''We're particularly strong in the South and Southeast, from the Atlantic into Texas.''
''If the life insurance industry is low technology, then the home service portion is no technology,'' said James B. Stradtner, managing director of Alex. Brown & Sons, a Baltimore-based securities firm that follows many of the companies in this business. ''But I don't think there is another mechanism available in the United States whereby the people who buy it would have insurance.''
Because of its small face amounts and frequent premium payments, home service insurance costs more per unit than insurance sold through other means. Insurers say that their higher administrative and accounting expenses have to be passed along to policyholders, who would not otherwise buy insurance without this pay-as-you-go procedure.
However, critics charge that a number of problems are inherent in sales of home service insurance. For instance, the customer's premium receipt book - possibly his or her only proof that a premium has been paid - may not contain the same information as the agent's debit book, which serves as the company's payment record. The books themselves, designed to be used for up to seven years, go through a great deal of handling and sometimes might not represent an accurate record of the transactions between insured and insurer.
Another reported abuse in this business is overloading, or selling too many policies to one buyer in relation to his or her need or ability to pay. An individual household may very well have more than one policy, with additions and deletions made over the years that may not be completely understood by the public.
Mr. Sheffield said that he would recommend certain changes in his state's insurance laws, such as forbidding insurance companies to compute premiums on a weekly basis when collecting monthly, establishing larger minimum policy amounts and mandating understandable language in the data given consumers. Additional recommendations dealing with modifications in home service insurance procedures include creating standards for lapsing policies and limiting the total insurance that can be sold to a household this way.
''There is no reason why individuals should, because they are poor, uneducated or undereducated, be made to purchase a product that offers less dollar-for-dollar value than any product on the insurance market,'' Mr. Sheffield said. ''The industry should be required to make changes in their products to make them more of an economic benefit for the insureds.''
A version of this article appears in print on Aug. 9, 1986, Section 1, Page 30 of the National edition with the headline: YOUR MONEY; Home Service Insurance.
