What this Country Needs is Good Home Service Again

[Travis Price]

Dissolvement of the family unit must be a factor. Why protect your family when you only care about them on the outside for pc points but actually hate them?

Even if that were true, which most people do care about their familyespecially in lower income situations because that's all they really have, it's not really an argument to the downfall of the market, it could have a part of the issue though.

Even if Todd hates his wife and kids.. Todd's wife and kids are the ones with the incentive to push for Todd to get insurance.. even if they pay.

A lot of it is digitalization from agents. FE is a product that has to be sold. You have to show need and create urgency.

Can't do that if you're not constantly building a relationship with clients. Getting TV leads, direct mail you only call, online leads limits your pool to people with "active interest."

 

[shonceman]

And they pay 40% renewal ? But isn't the product very expensive? If you did check draft I'm assuming replacement very possible . Shonceman said once fe guys crawling the area . Wonder what % of his business check draft .

Not really expensive. The premiums for LBL's Home Service product are essentially the same as their FE standard rate. There is no preferred rate on that side of the company, but they also don't rate up for tobacco. For a male smoker, the home service rate is actually lower than most FE Preferred rates. I ran a 64 year old male smoker on FEX Quotes the other day. There were only 3 companies that were lower, and only slightly so.

I rarely have a Home Service policy get replaced. There are occasional attempts, but most are unsuccessful. Once in a while I have to run out and save a case, but that's only happened a very few times. That's mainly because of loyalty, but there are also reasons why I have that client in a home service policy to begin with. No FE agent can compete with those reasons.

For the past few years, Home Service has been my primary focus. But I also write bank drafted FE, as well as fully underwritten products, depending on the client's needs. I do have several Home Service clients on bank draft, but it's a relatively small percentage of my debit book. If I put a client into a bank drafted Home Service policy, it's because that was the best option for them, given their health and other factors. In most cases, if I think the prospect can manage a bank draft, and they'll qualify for preferred rates, I'll write them a FE policy.

Ask Shonceman how he handles the debit card business.

I have a card processor app on my iPad and phone. I can swipe their card, or enter it manually. I have quite a few paying me over the phone, especially since the COVID lockdowns last year.

Also, LBL Home Service will draft DE cards with true SS billing.

Sounds as if you did it with a captive company.. It would be a world of difference as an independent.

I would have never believed I could enjoy working a debit as much as I do now. I also make a lot more money now than I ever did at a captive company, even as a manager.

 

[DonP]

I just ran a quote on a 65 mns . With family benefit I can give the client $16k for what lbl $10 k standard is . " Mrs Johnson is it really worth you giving your family $6 k less just so an agent can pick your money up every month ? Your throwing away $6 k so that agent can live in a big fancy house . Let's ask Tamica wether she'd rather have $10 k or $16 k !!!!. I could peel a few of those off the books but I agree most of these people would never have a policy if you didn't pick it up . But don't you have to go by sometimes 2-3 times to catch them ? American Amicable actually does direct monthly billing .

 

[scagnt83]

Regulators trying to get involved with determinations of the "best policy" for a client will never end well. There is a reason pretty much every single insurance product exists. If there was not a need for it, it would not be sold anymore because nobody would buy it.

Are people getting "ripped off" with certain types of policies? Depends on perspective I guess. If the alternative is nothing, they certainly are not getting ripped off. Because some insurance is better than no insurance 99% of the time.

What the regulators in that article do not realize, is that the issue is not the product. It is lack of access to other products. If they want consumers in lower priced products, make it easier for them to access those products. Of course that means major social changes for low income folks... like easier access to banking, internet, etc. along with financial education.

 

[scagnt83]

" Mrs Johnson is it really worth you giving your family $6 k less just so an agent can pick your money up every month ? Your throwing away $6 k so that agent can live in a big fancy house . Let's ask Tamica wether she'd rather have $10 k or $16 k !!!!.

Dont get me wrong. I get the sales pitch, and Im sure its effective. And Im sure some people are sold those policies who can easily maintain another policy that is on bankdraft or direct bill. For them, its a great thing.

But $6k less is better than nothing. And if cash is the main method Mrs. Johnson pays for items, if her access to banking is limited, or just has poor account management. Then what are the chances that policy stays on the books?? What are the chances her daughter actually sees that extra $6k?

Im a traditional life agent, but Im sure some of you guys know lapse ratios for debit vs. bankdraft. I know FE in general has a high lapse ratio compared to traditional life. But I would guess debit probably has a lower lapse ratio than bankdraft FE.

 

[PA Bill]

Adjusted for inflation, your average working man hasn't received a raise in over forty years. The big boys saw the writing on the wall before that and adjusted accordingly.
No sense trying to sell people with no money.

 

[rousemark]

In the old days there were no marketing costs really . I recall in the 80's working the CO's existing book and all referrals. Now to do many types of ins it cost money up front as everything is lead based now . An insurance agent getting in the business today and having a family needs $25 k saving for 6 months of lead cost and 3 mo th did living exp's . If not the pressure to produce will sink you . I'm talking the avg agent .

It can still be done the old way.. I know many agents that are doing it.

 

[rousemark]

Dont get me wrong. I get the sales pitch, and Im sure its effective. And Im sure some people are sold those policies who can easily maintain another policy that is on bankdraft or direct bill. For them, its a great thing.

But $6k less is better than nothing. And if cash is the main method Mrs. Johnson pays for items, if her access to banking is limited, or just has poor account management. Then what are the chances that policy stays on the books?? What are the chances her daughter actually sees that extra $6k?

Im a traditional life agent, but Im sure some of you guys know lapse ratios for debit vs. bankdraft. I know FE in general has a high lapse ratio compared to traditional life. But I would guess debit probably has a lower lapse ratio than bankdraft FE.

I have not found my FE lapse ratio any higher than the tadeonal products. But, then I have always worked the blue collar market for both so the only difference is the FE is smaller amounts.. In fact, I would say if i looked at over the years, I would say the FE was higher because it was mostly older folks.

 

[scagnt83]

I have not found my FE lapse ratio any higher than the tadeonal products. But, then I have always worked the blue collar market for both so the only difference is the FE is smaller amounts.. In fact, I would say if i looked at over the years, I would say the FE was higher because it was mostly older folks.

Thats good to hear. I would think it comes down to the agent client relationship more than the actual product.

Most industry stats ive seen put FE at 2x-3x the lapse rate as fully uw products. But perhaps that is because there are more "one and done" agents on the FE side who are not maintaining that relationship like yourself? Or maybe the long wait and medical exam makes people think twice about replacing the coverage? Id bet its more about the relationship.

 

[shonceman]

I just ran a quote on a 65 mns . With family benefit I can give the client $16k for what lbl $10 k standard is . " Mrs Johnson is it really worth you giving your family $6 k less just so an agent can pick your money up every month ? Your throwing away $6 k so that agent can live in a big fancy house . Let's ask Tamica wether she'd rather have $10 k or $16 k !!!!. I could peel a few of those off the books but I agree most of these people would never have a policy if you didn't pick it up . But don't you have to go by sometimes 2-3 times to catch them ? American Amicable actually does direct monthly billing .

Sometimes I do have to make multiple stops. But in the 21st century, most of my clients have cell phones. I call to make sure they're home and ready. That makes my job lots easier.

As far as you replacing my $10k policy with your $16k policy, you're welcome to try! I frequently follow FE agents who have sold the $16k that went NSF after a couple months and lapsed. When the client finds out that I'm still willing to collect premiums, they knowingly sign up for the $10k (or happily pay more to get the $16k from me). They do that because they know there's a far better chance of them being able to keep it.

There are 3 things that people consider when purchasing anything: Price, Quality, and Service. People place different value on each of these. It's extremely rare to find all three in the same product. In the example you just gave, price is the main emphasis. The client may well replace the policy on price, if that's all that's presented. But when I talk to Tamica's mom about her reasons for replacement, the emphasis will be on quality and service. Nine times out of ten, I'll win her back.