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Have you known of agents who thought they had a better idea, like Henry Ford? These folks are quick to offer you free advice – however, not all forms of compensation are necessarily obvious. Think of the people in your life who make recommendations to you, whether peers or supervisors. Ask yourself now, “Who can I think of that makes money only if I am successful?” Usually, only your supervisor is compensated directly on your success, and so has your true interests at heart. He or she wants to see you grow and prosper. After all, that’s how your manager earns a living, through your success! Now think of others who might stand to be compensated on your failure. From negative advice, could they capture a higher position in the Branch’s or Company’s standings? Could they get your leads? Perhaps, this “Negative Advisor” tries to get an unsuspecting Agent to “roll” their business, causing the Agent to leave his or her company and capturing the Agent’s customers in the process? Not only is buying into this plan not very well thought out, it can hurt both the customer and the agent himself in the process. Here’s why:

Let’s say that an agent we’ll call “Bill” has $250,000 in force, earning a decent living before he ever gets out of bed to write the first app. A rate increase comes and a “Negative Advisor” (who has no lead program and wants the Agent’s customers to be his leads) influences Bill to try and move business to his company with cheaper premiums, asking him to tell customers, “I know I told you that I had the BEST last time, but now I REALLY DO have the best.” First of all, this creates an obvious credibility problem with the customer. As a result, only a portion of his customers are willing to move to the new company, and Bill spends the majority of his time trying to convince these customers of his honesty. Of course, the new manager gets an override. Unfortunately, rather than retracing his steps to write these people cheap premiums, Bill soon begins to realize that he could have spent the majority of his time writing new business on a lead program and could have continued to grow renewals. Just from a production standpoint in his new deal, Bill’s income most likely will not grow if he can’t generate new business through a supporting lead program. But, now Bill’s situation grows even worse. Bill’s new company has a rate increase a few months later. He got paid a lower commission on the lower premium he wrote on the fewer customers he successfully moved – a triple whammy. Now he loses some of those clients too! After the inevitable premium increase at the new company, he tries to move to yet another company. Fewer customers move to the new one, and he gets even lower commission, no leads, poor financial rating, etc. The “Negative Advisor” laughs at the “Broke Agent” - all the way to the bank. This not-too-bright destructive cycle of cannibalization results in Bill whittling down his renewals to nearly nothing over time. Alarmingly, he also risks being in violation of various insurance laws and regulations. 

Believe me, most people are not this way. However, you need to protect yourself from being taken advantage. That’s why the question, “What’s in it for them?” is one that I always ask myself whenever free “Negative Advice” is offered to me. Some people feed off of negativity and make their way on other’s failures. I choose to take the higher ground and benefit from others’ successes. This is a slippery slope that some “Negative Advisors” will lead you down if you let them, trying to get you to see things the wrong way for their benefit. My advice to you, gained from my nearly 22 years here as an Agent, Unit Manager, Regional Trainer, Director of Agencies, Senior Vice President and President is extremely simple: you don’t have to take advice from negative people. You don’t have to travel down their illogical, financially destructive trail. What’s in it for me? Our mutual success is of course, because your manager and I can only do well if you do – there is absolutely no other way for us to benefit! In the Med-Supp business, commission structure rules for insurance companies’ agents are set by states’ Departments of Insurance and Federal Law. The rules include provisions that an agent can only be paid a first year commission rate of up to two times the renewal year rate, but only if it’s not a policy replacement. Companies must pay a level commission for several subsequent years on policy replacement. However, since many Med-Supp sales involve a policy replacement, in practical terms this means that companies which claim to pay higher first year commissions, really don’t overall. As an example, a company that says it pays 18 percent first year and nine percent in the renewal year in essence really only pays 10.5 percent in first year and five percent in renewal years on replacement business written – which are the replacements of course! By contrast, UA pays a high 15 percent level commission in all years as a commission, regardless of whether it is a replacement. 

The federal government and all fifty states have mandated that a replacement form be left in the home of every policyholder (see page 5 for more details). Additionally, most applications include questions concerning a client’s previous coverage and a section where the Agent certifies that all information is accurate and the application is completed correctly (also see page 5). The “Broke Agent” who bends rules in order to get a higher commission in another company will not be able to comply with these conditions, nor can any agent replacing your policies comply in the same way. Violating replacement rules can result in serious consequences that could include the loss of an insurance license and even civil penalties.

At United American, we insist that our representatives follow Company rules and regulations and the laws of the states. It is our objective to provide the very best service possible to our customers. Please familiarize yourself thoroughly with the General Underwriting Instructions manual, which clearly communicates your responsibilities as an Agent. By continually educating and refreshing ourselves on the rules regarding replacements and putting them into practice, we truly keep our customers’, Agents’, and shareholders’ interests at heart. Building long-term renewals is a very lucrative venture as we stay through occasional pain. As we have seen in the last 20 years, the wealthiest representatives at UA are smart enough to avoid letting a “Negative Advisor” turn them into a “Broke Agent” by ruining their attitude, taking their renewals, and ultimately, jeopardizing their career.

In addition to information regarding Replacement forms, you will also find in this edition of Vision interviews with three of our Branch Managers - Autry Freeman, Jack Curtis, and Danny Jones – which detail their views and experiences with Life insurance from the field perspective (see pages 6-7). Interest in Life policies is very high, and the income opportunity has never been better. Also, on page four, you will find important information regarding changes to the ProCare applications. Please review this page carefully, as it will help ensure successful underwriting and expedient policy issue. 

When you last picked up a fishing pole, you then decided your position in life. You picked up the handle, rather than being "on the hook". It just depends which end of the line you choose. With the right end chosen, you ensure your continual renewal success on UA’s T.E.A.M., as Together Everyone Achieves More!