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Term life insurance sales traps
Here are some top sales gimmicks life insurance sales people use to
trick you into buying a policy with them:
- Some unethical agents sometimes use your current age rather than (correctly) using your nearest birthday birth date to determine your insurance age. This can produce lower rates than all the other honest agents, even when quoting the same carriers. Once you get approved, the rate could be higher since the life insurance company rates you at your proper age.
- Some unethical agents will quote you at a better rate class than you currently qualify for, in order to give you the lowest quote, knowing you will never qualify for that low price. Then after the medical exam the agent may just say that the underwriters must have found something in your record that caused a rate increase. Find out the written class requirements.
Remember if you have any health issues, it's harder to get an accurate quote without submitting an application. The underwriter of your case will determine the quote at that time, or at least a very experianced agent with an underwriting guide.
- Some unethical agents will quote an annual premium broken into monthly payments, without including the finance charge.
This can make it appear that the dishonest agent is a few dollars a month cheaper than the honest agent, even with the same company and product.
When the policy is issued, you'll see it's more expensive and if your like most other busy people, you'll just take it because you don’t want to go through the whole process again. So ask your agent to quote you monthly and annual that way you'll catch any funny business.
- Some unethical agents will quote you lower rated or unrated companies. Although it's not really a trick, you want to check the financial stabilty of a company and how they do their marketing. Is the carrier so small the don't want to or can't afford to pay a rating company for an audit. Are they MLM / Multi Level Marketing?
- Some unethical agents quote you a non-guaranteed term life rate that has a lower front-end price then increases rapidly later in life. Honest agents usually quote a "guaranteed level premium" that will stay the same price that way for the entire length of the contract.
- Some unethical agents will order the paramedical exam before you've chosen them as your agent, the life insurance carrier, policy or price. Bad agents do this because they know that after you give blood for a medical exam, you will NOT want to go through it again with another company. Don't agree to any medical exam until you are absolutely comfortable with the agent, carrier, policy and price!
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