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Finding The Problem

“I haven’t found a problem, so there is no solution I can provide to you.”

I can assure you that I have problems but the insurance agent had spent the past hour sitting at my table talking at me and asking me one question in several ways: “How much do you want to spend a month?”

In fact, he had not actually identified himself as an insurance agent but said he was a “medical underwriter.”

I was reminded of this conversation during my research for this year’s Life Insurance Awareness Month feature. During that process, it became clear that the industry is still facing the problem of trying to sell more life insurance as the field force shrinks and consumers change.

The meeting with this agent revealed some issues in life sales. But more troubling was the path that led the agent to my table.

I am not suggesting that all agents are conducting themselves as this one did. In fact, I usually speak with highly accomplished agents and advisors, who are typically the ones doing things right. Even random agents I meet at industry conferences are likely to be high-level professionals for the sheer fact that they care enough to attend the event.

But what about the agents who typically serve clients of modest incomes and assets — people like me? When I got a curious envelope in the mail, I decided to find out.


The white, address-window envelope looked important. And in case I did not recognize that, it even said: “OPEN IMMEDIATELY/IMPORTANT INFORMATION ENCLOSED.” That accompanied “DATED MATERIAL” and for good measure, “SECOND NOTICE/TIME SENSITIVE” — in red so that I knew it was super-duper urgent.

Inside was an official-looking form with the heading “2018 BENEFIT INFORMATION FOR PENNSYLVANIA CITIZENS ONLY.”

The text said, “You may qualify for a state-regulated program to pay for your final expense” and that “This benefit will pay for 100% of all funeral expenses up to $35,000. This payment is tax-free for Pennsylvania residents.”

Although I recognized that this was a life insurance lead generator, I could see how a typical, older consumer would think this was an actual government program. (That would particularly be the case with a version I received recently that looks like an IRS form.) I was intrigued to see what would happen next, so I filled it out and mailed it.

About two months later, somebody identifying himself as a medical underwriter followed up with a call. He was not clear about what he wanted but asked for a meeting, which we set up for the next day at my apartment.

[Although the agent allowed me to film, I am not identifying him. He never asked me about my job and I did not volunteer that information.]

He started by telling me that the form did not refer to a government program. He was going to talk to me about a state-regulated benefit — life insurance. He said he also wanted to make clear that it was not free, because people often misunderstood the form.

Roundabout Straight Shooter

The agent said he wanted me to know that he would be talking about a safe alternative and that he was not licensed to trade equities. About five minutes of describing reasons people typically send in the form, he asked me, “Where do you find yourself?” I have term life, I told him.

He showed me marketing material from companies such as AARP and MetLife, which he later said he only used for comparison (“They’re too expensive”). At 10 minutes in, he asked me how much term I had and for how long – $250,000 and fewer than 10 years left on a 20-year policy. I also added that my ex-wife was the beneficiary.

After he explained whole life some more, he asked me who was responsible for me when I die.

“I haven’t figured that out yet,” I answered, feeling just a tad more alone in the world.

“You’re not really interested in this, are you?” he asked.

I assured him that I returned the form because I wanted to know what the benefit was. But I was thinking that I was in fact interested in retirement security and a little anxious about my exposure to long-term care risk. I figured he would get to that.

He described the details of whole life and the application process for another 15 minutes until he asked me how much I wanted to spend each month on life insurance: “So do you have a budget in mind? $50? $75? $125? $200?”

It is one of the oldest sales techniques in the world — find a monthly payment and figure out something that will fit that number. It is a textbook car sales tactic.

But in this case, we did not even have a vehicle to talk about. We had established I did not need whole life. I asked if he sold term. He said he did but it was a hybrid.

Dizzy From The Ride

That “hybrid” turned out to be universal life, which he had pivoted into variable UL and described the intricacies of VUL. That turned into a discussion of indexed UL and that product’s details.

Even though I knew what he was talking about, my head was spinning. I could not imagine what his typical prospect felt. After an hour of basically asking me what I wanted to spend on life insurance, he said he could not find a problem to solve.

But I am in my 50s with some savings and plenty of longevity anxiety — basically an ideal prospect for something that says retirement security on it.

As Americans struggle with the retirement crisis, the insurance industry is a logical source of solutions. But if deception continues to be a marketing method, the industry is only going to be yet another problem.

Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. Steve may be reached at [email protected] Follow him on Twitter @INNSteveM. [email protected].

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