It’s our practice to compare all the companies that may have a chance of providing the best solution for our clients. Some people have a preferred bias toward using participating whole life insurance as their choice for cash value life insurance while others lean more toward using some type of universal life insurance.
Quite honestly, we don’t feel there’s a right or wrong answer here. Both types of policies will work well with a cash accumulation strategy so long as the policies are structured properly.
Fortunately, it’s pretty easy to compare universal life products i.e. current assumption universal life and indexed universal life insurance.
Life Insurance Company Spreadsheet Trickery
However, comparing participating whole life insurance is an altogether different beast.
As I mentioned a couple of weeks ago in my post, “Do We Need More Life Insurance Agents?”, it seems that most carriers go out of their way to make it difficult for us to business with them.
It sort of harkens back to a time when investment information was controlled by retail stock brokers. Back in the day, if you wanted any information on a stock you had to call your broker, get a research report from him/her and then place your trade with them. They controlled the information flow and the transaction cost was astronomical.
Eventually with the dawn of the internet and free information readily available to us all, the retail brokerage model was forced to change.
It’s time for the life insurance industry to do the same and in particular those that offer participating whole life insurance.
If it is truly the goal of life insurers to help the largest number of people possible, then why make it so difficult to access their information? What are they afraid of?
What’s more is that it’s time for the industry to agree on universal and/or standardized language of policy features and riders so that it’s easier for consumers to comparison shop.
Can't We All Just Call a Paid Up Additions Rider the Same Thing?
Why does one company call it a paid up additions rider, one call it an additional life insurance rider, the next calls it an enricher rider or enhanced paid up additions rider. All of these riders work the same way and serve the same purpose.
It seems obvious to me that it’s a clear attempt to make it difficult for anyone to compare your product to another company’s product. This is such an antiquated marketing tactic. If you’ve ever watched the show Mad Men you know exactly the sort of thinking that I’m talking about.
On a side note, for entertainment purposes only, please spend a few minutes watching this life insurance sales “training” video from youtube and you’ll understand what we’re up against.
The truth is that insurance companies don’t want you lining up their products beside their competition.
If they can keep the water muddy, then you can be more easily persuaded by the things that they list as bullet points in their marketing brochures. Every company will list these things as being important items to consider:
- how long they’ve been in business
- our company’s history
- financial strength
- A.M Best rating
- Our commitment to policyholders
It should, because it’s the sort of drivel that every company’s corporate marketing department tells us is what people really care about. It’s laughable really.
What's In It For Me? The Only Question that Matters.
I’ve been a licensed agent since 2000 and I’ve yet to meet anyone who really cared about any of those things at all. Of course people want to do business with a financially stable company and preferably one that didn’t just start issuing policies last week.
However, our clients assume we’ve probably already checked that out. After all, we’re not in the business of writing policies with companies that are likely to be insolvent—not a very good business model if you plan to stick around.
Why can’t we just have one piece of software that all the companies are willing to participate in?
Where agents can access accurate illustrations from every company, every product and then we can compare them for our clients. As it stands now, there are products that attempt to do this but the execution is far from perfect and many companies choose not to have their products included.
Did I mention that quite a few companies won’t even let me access their illustrations for comparison until I’ve agreed to contract with them?
Why would they do that?
It costs me time to follow through the process of filling out their paperwork and there’s an actual hard dollar cost for them to appoint me with the state department of insurance.
I suppose they do it because they mistakenly think that because I’ve contracted with them, I’ll feel some obligation to send them business.
Guess what? It doesn’t work. If a company’s product isn’t the best fit for my client, they’re not going to get any business from me. Pretty straight forward if you ask me.
If they really want to be competitive, then offer competitive products in whatever segment of the market the company wants to target. Figure out a way to make your product perform better, give better benefits to your policyholders—that’s how you win more business.
We don’t get more clients because we spout off a bunch of platitudes that they could care less about. We grow our business by doing a better job than our competition, by providing greater value and by clearly showing that to our prospective clients. You win by being better than your competition.
If you’d like for us to complete a comparison for you, we’re more than happy to do that. We’ve spent a great deal of time to develop our own proprietary method for doing this very thing. It’s a completely manual process but it is the most accurate way that we know of to look at one product vs. another. Contact us if that interests you and we’ll get started.