How involved is the insurance agent after purchasing a policy?

[scbunker]

I purchased term life on myself and my wife and disability insurance on my wife nearly 2 years ago. At the time I didn't qualify for an individual policy for myself because of the coverage I had through my employer.

A month ago I moved to a new employer. My new employer has some kind of deal with an insurance salesman that if we purchase an individual disability policy through him, my employer will reimburse a significant portion of the premiums. It is truly an individual policy and not a group policy. The only policy that qualifies for the reimbursement is from MassMutual.

The insurance salesman isn't great to work with. He is high pressure, and I've had to be very forceful regarding requesting information and getting what I want in the policy. He actually didn't give me an illustration. I had to request the application (that he filled out for me during our first meeting) from his secretary, and was able to ask questions of the policy based on reading the application and seeing what riders he selected for me. He also managed to slide in a few positive comments about the whole life policies he offers. After pulling some teeth, I was able to get in the policy precisely what I wanted and questions answered to my satisfaction, and it's actually a good policy. I was willing to put up with him because of the company premium reimbursement

Because he wouldn't quote me any other companies besides MassMutual, I went to the agent from whom I previously purchased life and disability policies for additional quotes. They also quoted me MassMutual - it's the same policy, but the premium from my employer's insurance salesman is nearly half when considering my employer's reimbursement and an additional 15% discount that the salesman said he could somehow get due to his volume. Additionally, the MassMutual policy, seems to be the best policy for me, as compared to the other two quotes I received.

Now to my question: how involved is the original salesman/agent for life and disability insurance matters moving forward? If I purchase this policy through him am I stuck with him and have to go through him for matters regarding this policy in the future, such as exercising future purchase options and filing claims? If so, after I purchase the policy, is it possible to change the handling of the policy to another agent? If I I can do everything I need to through MassMutual directly, or if I can change agents if he's too difficult to work with, I'll go ahead and keep the policy. Else, I'll think harder about whether I want to deal with this guy for years to come. He looks to be pretty close to retirement age, though, so maybe not too terribly long.

(One slightly off-topic aside: MassMutual pays dividends to their policyholders. Does anyone know the amount that these dividends have been in the past? The salesman claims that you qualify for dividends after holding the policy for 4 years, the dividends are applied to your annual premium, and he has some clients whose premiums have been reduced by half due to the dividend payout. The policy is good and a good price without even considering dividends, but are they even worth considering at all? Half-price premiums seems too good to be true.)

Thanks for the help.

[scbunker]

Wow, I'm long-winded. Sorry.

[Scott at MD Financial Services]

Not everyone in my profession is a professional and you sound like you have encountered one of these types.  The really short answer is if you have the best deal from your employer plan offering to be Mass then that is what you should take.

To answer a few of your questions:

I would be very interested as to why the employer will only 'subsidize' the purchase of a Mass policy, is it due to them getting a fee from the agent?  I don't know but if so then that is rebating and it is specifically illegal in our business because that means an agent is giving part of their commissions as an incentive for a purchase.

The agent does NOT have a 15% discount due to his 'volume' of business, he probably has a list bill agreement set up at the employer that allows for this discount.  The only carrier I am aware of that states a high volume seller of Disability gets an advantage over a low volume seller of disability is Standard, their deal is 10% discount is allowed for a rep that sells 5 or more contracts in a year.

That is your insurance application you signed, if you think something is odd with the rep then it is your right to have a copy of the application you signed and attested to under state law that the information you provided was accurate.  You should also have a copy of your application in the back of you policy, go over that carefully to make sure the answers you gave are what was recorded, if not report it to the company directly, their phone number will be on the front of the policy.

Mass Mutual is traditionally a General Agency system so you can either call the home office or if the rep has an office in the local Mass Mutual agency you can call and talk to the General Agent and ask for a different rep.  We call it an Agent of Record change.  If you think this is going to cause a problem for you at work to get the $$ back from your employer you can always wait until the proverbial check has been cashed then ask for the rep change.  They are certainly going to ask you why so be ready for that but once done your policy will then be handled by a newly assigned rep.

If I missed any question, just drop me a note and I will try and get it answered.

 

[The White Coat Investor]

You don't have to put up with that sort of service. If one of my advertisers gives you (or anyone else) service like that, I'd like to hear about it.

But to answer your question, I have no current relationship with anyone who ever sold me a disability or life insurance policy. I know some people do (to buy more policies, ask questions, deal with claims etc) but I never have.

[Craigy]

In my experience, your contact with the agent varies depending on the agent.  One agent tried for months (years) to talk me into whole life and disability after buying a term policy.  Another sat back and just told me that I will probably get something in the mail once a year about converting to whole life, if I was interested.  The first guy sells insurance to several people at my firm so he walks in the door every few months.  The second is a personal friend of mine.

Re dividends, on my Northwestern term policy, I believe there is some "dividend" element, and the price of the policy appears to be a little different each month, might save me maybe two or three dollars.  It isn't guaranteed and it didn't factor into my decision to buy the policy.  If anything, it feels more like a gimmick to make me think of insurance as an "investment" so that I'll buy whole life.   :P

[scbunker]

Scott @ MD Financial Services wrote:

I would be very interested as to why the employer will only ‘subsidize’ the purchase of a Mass policy, is it due to them getting a fee from the agent?  I don’t know but if so then that is rebating and it is specifically illegal in our business because that means an agent is giving part of their commissions as an incentive for a purchase.

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I don't know the deal and I didn't ask. I just know that my employer will reimburse to me each year. The salesman said it was only this policy that qualified. I don't know if that has anything to do with what my employer has worked out or if that was just the salesman. If it weren't a good policy for me I would decline and get quotes elsewhere.

Scott @ MD Financial Services wrote:

The agent does NOT have a 15% discount due to his ‘volume’ of business, he probably has a list bill agreement set up at the employer that allows for this discount.

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I do remember he used the word "list" when describing how he could get a discount. I didn't really understand and so in my head 'list' probably became 'long list of policyholders' which my brain then simplified to 'high volume.' I don't know what a list bill agreement is.

Scott @ MD Financial Services wrote:

That is your insurance application you signed, if you think something is odd with the rep then it is your right to have a copy of the application you signed and attested to under state law that the information you provided was accurate.  You should also have a copy of your application in the back of you policy, go over that carefully to make sure the answers you gave are what was recorded, if not report it to the company directly, their phone number will be on the front of the policy.

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That I signed it is the reason I gave for requesting it. He seemed to think it was an odd request. There were two items that were incorrect. One was my former occupation (he didn't ask me this question when he filled out the application), and the other was "Have you lost more than 10 lbs in the last 6 months." He did ask me this question and I responded that I had lost 15 lbs in the last 6 months due to diet. His response was that they're really looking for people who were losing weight unhealthily and he marked down 'no'. After I received the application and reviewed it I emailed him and copied his secretary to tell him these two items were incorrect on the application. When we got my wife's disability insurance, there were some incorrect items on the application that I caught and then when I received the policy there as an application amendment attached to it. Should I be concerned about these two items on the application?

Scott @ MD Financial Services wrote:

Mass Mutual is traditionally a General Agency system so you can either call the home office or if the rep has an office in the local Mass Mutual agency you can call and talk to the General Agent and ask for a different rep.  We call it an Agent of Record change.  If you think this is going to cause a problem for you at work to get the $$ back from your employer you can always wait until the proverbial check has been cashed then ask for the rep change.  They are certainly going to ask you why so be ready for that but once done your policy will then be handled by a newly assigned rep.

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I'll have to deal with this guy for as long as I'm at this company because he also handles the 401(k). I don't qualify for the 401(k) until I've been employed for 1 year. I bet it'll be fun setting that up with him  :roll: .  It's a good company otherwise and I like it here. This salesman seem to have just gotten an 'in' with the owner.

Another question: do I have a right to see the Illustration Summary? I know what it looks like because I received them from the other agent. But when I asked this guy for it his response was "That's not for you." But he did give me a marketing packet, and I just saw that the fine print at the bottom says "This presentation is not valid unless accompanied by a Radius Disability Income Insurance Illustration Summary." That seems to indicate that I should have it. I was able to review it anyway since my other agent sent me one, and I'll certainly review the policy before accepting it.

Thanks for all your help.

[scbunker]

Craigy wrote:

it feels more like a gimmick to make me think of insurance as an “investment” so that I’ll buy whole life

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This was actually his occasion to bring up whole life insurance. While he was touting the benefits of receiving dividends he said he didn't know why people invested in bonds that returned 2-3% as a safer investment when he could get 6% with the Mass dividends through a whole life policy. I'll just have to brace myself for more whole life sales pitches when I sign up for the 401(k) in a year.

As an aside, I was warned in advance by another employee that he was sales-y and pushy. So I'm not the only one.

[Scott at MD Financial Services]

The agent does not have the right to change your answers under any circumstances without your consent.  Your signature attests that the answers YOU provided are accurate, if the question is 10 lbs and you lost 15 the carrier would want to know about this otherwise they would have had the question ask have you lost more than 16 lbs and then your answer would be no.  That is unacceptable in my opinion.  I would be concerned and I would visit with the company about the issue since the secretary and agent seem to lax about being accurate with your details for your underwriting.

Everyone should get an illustration if they want one, it will show in summery all the details of your policy.  By getting an illustration you can at least match up the premium in the illustration to the policy to make sure something different was not placed in your policy.  Sounds to me like you should call the carrier and speak to them. You have something very 'odd' going on and there is nothing that sounds above board in my opinion.  I hope I am wrong but after 24 years in this business I am probably not....

Best of luck, sounds like you need it!

[StuRedman]

I get a Christmas card every year.  I am sure he would love to sell me some whole life, but I told him to bugger off.