5 Ways to Identify & Protect Yourself from Predatory Final Expense Solicitation
June 23, 2019
Which Insurance Company to Purchase Final Expense?
Final Expense Insurance - It's Just Fancy Marketing!
In 2019 the insurance companies in 2019 have powerful ways, distribution channels, to reach you and to reach all consumers. Sometimes the commercials, advertisements, media is NON-STOP and may create more confusion than anything else.
You click an ad on Google or Facebook for Colonial Penn and next thing you know, Alex Trebek is EVERYWHERE! Mutual of Omaha is much the same way, don't know about you but Mutual of Omaha follows me around with those creepy ads like they know my every move, like they know my every next move. You know the feeling?
Marketers are SAVVY people, technology empowers them with these creepy tools to follow you, me and us around. But, if you are shopping for final expense, burial insurance or life insurance in general, you probably have clicked many websites and now may have an army of insurance companies following you around with their own version of creepy ads. Which, in turn can make your decision even more difficult!
State Farm, Colonial Penn, AARP, Globe and many others are tracking your every move. Who should you trust?
Here is a simple and compelling case for you to consider an independent broker and NOT Colonial Penn, NOT AARP, NOT Globe, NOT State Farm. That simple compelling reason is;
YOU SAVE A LOT OF MONEY AND YOU WORK WITH SOMEONE THAT HAS IS 100% CONCERNED ABOUT AND FOCUSED ON YOUR BEST INTEREST (NOT THE AGENT OR COMPANY).
Independent agents are just that, concerned about your best interest and do your shopping for you! They will save you a LOT of time and money, but there are some things you should be aware of.
Most independent agents will have anywhere from 5-10 insurance companies in their insurance toolbox. 5-10 insurance companies is typically enough tools in the toolbox to be able to do the job and get you the absolute best policy and lowest rate 95% of the the time. Each case, each person is different and different tools are required for different cases depending on health classification, budget, lifestyle and other factors.
If you are looking for a policy and contact Globe, AARP, Colonial Penn, State Farm and any non-independent, they will only have one, maybe two, tools in their toolbox.
Each of these companies has really good tools for certain jobs (cases), but if you need a hammer for a specific job it's best to use a hammer, not a pair of pliers turned sideways.
Some of the problems you may run across with an independent is that they can fly under the radar of the regulatory and enforcement agencies vs. a traditional insurance company.Â
Independents can get away with stuff that insurance companies can't (i.e. like misleading advertising). Let's be real, insurance agents are in business to SELL and while 99% of the agents operate ethically, the other 1% is like a Fox in a Hen House.
This conversation is NOT intended as a slight against any company or independent nor to scare you, rather it's to help you understand how to find the best policy and lowest rate while avoiding a bad experience. Our intention is to eliminate the confusion and doubt when you are talking with an agent about Final Expense or Burial Insurance.
There are occasions here when speaking with potential customers and clients that we hear; "Are you a real company?" or "How come I have never heard of you?" Hopefully this conversation will clear up some of that confusion!
Did you know that AARP is really just an IMO?
Advantages Of Working With An Independent
- Have access to many carriers and will help you find the best policy and lowest rates
- Diverse knowledge about many carriers and policies
- Very skilled at matching health conditions to proper carriers and helping people find coverage, even when people believe they are uninsurable
Disadvantages Of Working With An Independent
- Not as knowledgeable about any given carrier or policy than someone directly at the insurance company
- May have incentive (bonuses, higher commissions) to promote a policy in their best interest, NOT YOURS!
- Frequently use misleading advertising or promotions
A Case Study in Confusion
Now this is where it can get confusing for the average consumer.
I will cite Mutual of Omaha as a good example of how and why you might be confused about where to purchase your insurance.
If you are above the age of 50, it's very likely you have received a direct mail postcard from Mutual of Omaha - DIRECT FROM MUTUAL OF OMAHA. The mail is direct from Mutual of Omaha, with clearly documented contact info including phone number and website.
Then, all of a sudden you respond to another direct mail postcard that is NOT from Mutual of Omaha. Matter of fact, that postcard has no information about the company that sent it, the postcard just makes it sound like you are entitled to some kind of a government benefit, subsidy or are eligible for a state regulated program, it might sound like a scam but it's too tempting to not return the postcard (how to protect yourself from predatory telemarketers.)
After you return the postcard, you receive a phone or maybe even someone knocking at your door explaining this burial insurance program. Then, all of a sudden this someone presents some Mutual of Omaha literature and gives you a quote. This might be confusing, it's easy to think that this someone is from Mutual of Omaha.
Burial and Final Expense Insurance - It's All Marketing!
The status of the Burial and Final Expense Insurance market is that it's ALL ABOUT THE MARKETING. There is nothing fancy about these policies, they are VERY simple, yet the marketing and advertising will spin this story and confuse the heck out of you and me both.
Burial insurance or final expense insurance is WHOLE (PERMANENT) LIFE insurance for people over the age of 50, although a few companies have policies for ages 45+ (i.e. Mutual of Omaha). Final expense whole life policies are also LOWER FACE VALUE (LOWER BENEFITS) designed to cover end-of-life expenses.
Avoiding The Trap - Simplified Issue vs. Guaranteed Issue
If you made it this far in your reading, which we hope you did, the next section is SUPER IMPORTANT for you to understand how to shop for final expense!
Citing the Mutual of Omaha story above, I would like to explain what just happened in those two postcard examples, and maybe clear up some confusion!
Simplified Issue Policies (No 2 Year Waiting Period) - Both the Mutual of Omaha postcard and the state-regulated program postcard are soliciting SIMPLIFIED ISSUE WHOLE LIFE POLICIES, which simply means you do NOT have to take a medical exam.
Insurance companies are able to do this because they can reference your medical and prescription history via the MIB (Medical Information Bureau). Insurance companies save an unimaginable amount of administrative costs by offering you Simplified Issue. Likewise, you save an unimaginable amount of time and headache for the convenience of a simplified issue policy.
THE TRAP
NOW, PLEASE PAY ATTENTION - It is VERY easy to get caught in the trap of "Guaranteed Issue" vs. "Simplified Issue". When you see the following advertisements or promotions, please understand the differences (it will save you a LOT of money and it will prevent incredible frustration and heartache when you pass);
- GUARANTEED ISSUE, "No Medical Questions, 100% Approval" - MUCH MORE EXPENSIVE, MUCH LOWER COVERAGE AND YOUR FAMILY WILL NOT GET THE BENEFIT FOR 2 YEARS.
- SIMPLIFIED ISSUE, "No Medical Exams" - MUCH LESS EXPENSIVE, MUCH BETTER COVERAGE AND IF QUALIFIED YOUR BENEFIT IS AVAILABLE ON DAY 1.
Colonial Penn is famous for setting their mousetrap with their $9.95 life insurance advertisements on TV and radio. Those are GUARANTEED ISSUE policies, your death benefit will likely be less than $1,000, your rate for the amount of coverage you receive is some of the highest in the industry (they gotta pay Alex Trebek somehow!)
Selecting the Perfect Insurance Company, Perfect Policy and Lowest Rate
Finding the perfect policy and best rates for healthy people (smokers and non-smokers) is relatively simple. There are tons of resources on the internet, if you are a DIY person (do-it-yourself) then you can easily find competitive rates and carriers on your own without an agent although a a good independent will certainly be helpful.
The minute you add any kind of health condition or prescription medication, it gets VERY tricky. You may feel you are insurable or you may feel that you have to get a Guaranteed Issue policy. A skilled, experienced and resourceful independent agent is a MUST HAVE in this scenario.
