Once upon a time, I was actually an insurance agent. (Okay, I admit it: I still am.) I was a broke college student and the only companies that would have me were the local restaurants and the insurance agencies. Well, being a waiter gets old pretty fast, so it wasn’t long before I gave insurance a shot.
In the process of signing contracts, getting trained, and selling insurance products, I kept asking myself the same thing over and over again.
“Am I the slimy insurance agent now?” I wondered if I started looking like the evil car salesman.
Which led me to the next logical question, “Is this insurance company… evil?”
In other words, will this insurance company pay when it’s time to pay? Will this company put the customer first, or is it all about profits? Is there something to this whole “mutual vs. stock” debate?
Well, after five years as an insurance broker, I think I can answer some of these questions successfully.
First: Are insurance companies evil?
Second: Are insurance agents immoral?
Well, the answer is probably “No…” with only slight hesitation at the end and a gentle tugging at my collar. In part, the feeling of “evilness” comes from a combination of the company seeking profits, and the acts of the occasional desperate insurance agent seeking commissions. This sort of situation can lead the company to push more profitable, but less appropriate, products onto their agents, and the agents to sell high commission products even when it may not be in the best interest of the clients. Both pitfalls can be avoided simply by educating yourself before shopping for insurance.
Having said that, there are certainly a few times in which the behaviors of an insurance company have a distinct flavor of “evil.” Here are three such circumstances.
1. When they want to be paid even before their own clients.
I was reading on the blog of Las Vegas personal injury attorney, Ryan Anderson, who pointed out the astonishing idea that some insurance companies feel that they are first in line to receive compensation after a lawsuit, even before their own client. The article is a little dense, but Ryan contends that the rulings of the courts are pretty clear and this prevents the insurance companies from actually winning such an argument, but it’s shocking that they would even try to make such a contestation.
2. When they try to trick accident victims.
I probably shouldn’t share this story, but it’s a good one. An associate of mine at Richards and Associates used to work as an attorney for a large law firm which represented some insurance companies. He once told me that the insurance company would look at a case and think about how much they expected to pay. If it was pretty high, and the injured person was pretty poor, they would try this tactic: Call up the injured client, offer a low-ball amount, but then say “we’re not authorized to offer more than that in dollar amounts because the bosses think it makes us look bad. But we can probably offer you this amount PLUS a new car, all expenses paid.” The client would get all excited, as if they had just won on The Price is Right, and take an offer with a value in the low tens of thousands when they could have easily won and received many hundreds of thousands.
3. When they abandon humanity for policy.
While working in the insurance industry I had many opportunities to speak with underwriters – those people who basically have the final decision on who gets approved and who gets denied. In one case I had met a lovely young couple who had tried to get pregnant and failed. They had given up and were working on adopting. Yet, because they had tried once to use fertility treatments, no health insurance company would cover them at all. For anything.
I was appalled. I spoke with underwriters at each company, explaining that they were willing to sign any documentation, attesting that they were no longer going to try and get pregnant. Nevertheless, each health insurance company had a strict standard which would not allow this otherwise healthy couple to purchase a policy.
Finally, after dozens of phone calls, I reached an underwriter at Assurant who actually listened to the circumstances of the case and made an exception for us. Hooray for humanity!
Happily, these three examples are the abnormality and not the standard for most modern insurance companies. The reality of online reviews, and social media means that the insurance companies simply can’t get away with the shady behavior that overshadowed their entire industry just a decade ago. For the most part, when people ask me, “which is the best insurance company?” I say “Whichever is the cheapest.” But I admit I usually cross my fingers and hope that it’s true. The reality is we just never know when an insurance company is going to turn on us.
Greg Hamblin is a writer, online marketer, insurance broker, father, and all-around nice guy. He likes to tell it like it is and thinks honesty is the best policy. Can he talk to you about a life insurance review? Seriously, this indexed universal life product is just the thing for you!
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