Why Broad Market Exposure Is Important
The life insurance industry has gone through tremendous change in recent years. Insurance companies have changed their philosophy from trying “to be all things to all people” to focusing on niche markets where they can deliver especially competitive value and capture market share. The insurance company that will deliver the best value to you depends upon the type of product that will best meet your needs, your age, your sex and your medical profile.
Insurance companies have also abandoned uniform underwriting guidelines, and risks are evaluated differently by companies. To deliver the best value to clients, an insurance producer must maintain broad market exposure to be able to access product and underwriting differences.
For example, if I walked into an office with a half dozen executives who told me they were all the same age and they were all non-smokers in excellent health and they all wanted a $1,000,000 10-Year Term policy, and I found as I questioned them that the first person was in excellent health but he took medication to control his cholesterol, and the second individual was in excellent health but he took medication to control his blood pressure, and the third person was in excellent health but his father had a heart attack and died at age 59, and the fourth person was in excellent health but he smoked an occasional cigar, and the fifth person was in excellent health but he was a private pilot, and the sixth person was in excellent health but he weighed 20 pounds more than his associates; each of these men would be placed with a different insurance company to get the best Term insurance rate.
Another example illustrating underwriting differences happens most frequently with our older clients. Many of our clients are in their 70’s and 80’s and purchase life insurance to pay their estate taxes. It is normal for people that age to have medical issues, and it is not uncommon for insurance companies to evaluate medical impairments differently. We’ve had many situations where some companies will decline a risk entirely, other companies will rate the risk (charge a higher premium than normal), some will view the risk as being normal and one or two may actually make a Preferred offer. In these situations, it is the underwriting decision that drives the placement of the policy.
It’s imperative for an agent to represent the leading insurance companies impacting the competitive market place and be unbiased and objective in order to represent a client’s best interest. We love to compete for business, because we find very few competitors who work as diligently as we do to identify the best solution for a client’s insurance needs.