Insurance is a dirty word. No one likes to talk about it. No one likes to buy it. For some people, the only thing it’s good for is rando commercials. Because of that, it’s safe to say that insurance is likely one of the most-hated financial product out there. Of course, it doesn’t help when you’re working with an insurance agent who is trying to screw you. Take it from a former insurance agent, the trust just isn’t there. Some people are just paranoid, but others have legitimate mistrust because of a past experience. That being said, here are some things to look to find out if your insurance agent is fleecing you.
He’s doing most of the talking
The point of insurance is to make sure you’re covered in the case that something bad happens to you. So doesn’t it make sense that you would be doing a fair portion of the talking? Of course, it’s important for the agent to educate you on how the insurance works, what features it includes, what it costs, etc. But if you’re talking with an agent who blows through all that without really getting to know you and your needs and concerns, you know he’s only got one thing on his mind: the commission.
She won’t tell you how she’s paid
Every insurance company pays their agents differently, but the formula is always pretty simple. For example, when I was selling insurance, I was paid 50% of the annual premium up front. So if I sold a $20/month policy, that got me a little under $120 (since the annual premium is usually a little less than the combined monthly payments). Every single person I met with knew that formula. I volunteered it before they even had a chance to ask about it because I wanted my potential clients to know that they could ask me anything and I would be 100% honest with them. You may find it difficult to find an agent who is willing to volunteer that sort of information without some sort of prompting, but if you do ask and she responds saying “it’s complicated” or somehow tries to skirt around the question or change the subject, you know that she’s not fully committed to you as the client.
You know just as much about insurance as when you walked in
Your meeting with an insurance agent should be about one thing and one thing only: education. Yes, you went in there to actually buy some insurance, but if you leave with a policy in hand and know just as much about the type of insurance you just bought as when you walked in, your agent is doing something wrong. A lot of insurance agents are only interested in closing the deal, that is getting your money and getting you out the door before you have second thoughts. But if the agent does it right, your decision (including the type of coverage, amount, etc.) is an educated one and it is completely yours.
If, instead, you’re basing your decision off of what the agent told you is the best decision for your situation, you’re getting closed plain and simple. Don’t get me wrong, I think it’s important for an agent to give recommendations. I always made strong recommendations based on my experience and knowledge. But in the end, if your agent is unwilling to give you all the information and let you make the best decision for yourself, run away.
He capitalizes on your emotions
A lot of insurance agents are taught to capitalize on your emotions, especially fear. I especially ran into that problem when talking to people about life insurance. It was always a tricky situation because on one hand, it was important for me to show them how urgent it was (because if you’re married and you have kids, life insurance is urgent). But on the other hand, I wanted to be clear that I didn’t want them to use fear as a motivation.
Another tricky thing when it comes to life insurance is to watch how the agent uses the emotions of the “surviving” spouse to discuss the benefit amount. There needs to be a healthy understanding of the financial need that will exist, but if they’re going on and on and on about it and you feel like your emotions are overtaking your reason, don’t be afraid to tell him you’ll sleep on it, then find a new agent.
She won’t give you time to think
Insurance agents have production goals, and they also have deadlines to meet those goals. If a deadline is coming up and an agent hasn’t met her goal yet, you better believe she’s going to be hitting prospective clients hard to make a decision quickly. There’s a fine line between emphasizing urgency and being downright overbearing. If you ever feel like your agent is pushing you to the point that you don’t feel comfortable, don’t be afraid to let her know that. If she continues to push you after you say that (some people can’t see past the dollar signs in your eyes), you’ve found yourself a loser. Let them miss their goal. They obviously aren’t earning it.
Here’s something a pure salesperson has a hard time understanding: The best client relationship is a long-term one. If you screw your client over during your first transaction together, what makes you think they’re going to stick around? Of course, there are going to be people out there who are too lazy or dumb to get rid of a one-sided financial relationship like that. Don’t be one of those people.
Have you ever been fleeced by an insurance agent?