Insurance I: What is insurance?
There are many different types of insurance, but the premise behind all of them is basically the same. An insurance policy is protection against loss. When something goes wrong or something goes missing, insurance reimburses the individual who experienced the loss. In some cases the insured person isn’t the one who receives payment, but they have been protected.
To lower the risk of loss, people purchase insurance policies from a company. When buying a policy, the person agrees to pay a premium, which is a relatively small, regular payment based on the losses that may occur. If the insurance provider determines there is a greater chance of risk as compared to the average policy, the premium is usually higher. Premiums are often paid monthly or quarterly, and can add up over time up to be greater than the expense of replacing the insured item.
Many types of insurance only cover a certain amount of risk on an item. The amount the policyholder must pay before an insurance policy begins covering an expense is called the deductible. In the event of damage or loss to whatever the policy covers, the policyholder is responsible for the deductible no matter what. If the cost of damage or loss is less than the deductible amount, the insurance company does not pay anything. If the cost is greater than the deductible, the policyholder only pays the deductible, while the insurance pays the rest. Generally, the deductible amount is related to your premium, with a higher deductible usually requiring a lower premium, and vice-versa.
Selecting the right insurance involves careful research and evaluating many different options for coverage. This is why many people use an insurance agent to assist with making the right choice depending on their needs and financial situation. Agents often interview potential or current clients to get an idea of which insurance policies would benefit them the most. Based on their needs and individual risk, agents can often give potential customers a quote, which serves as a cost estimate for a specific policy. This is only a rough idea of what the policy will cost, because evaluating the risk associated with a given customer can take time. Insurance companies often compile an insurance score to quantify the risk an individual poses and calculate premiums accordingly. Credit scores play a major role in insurance scores, but past insurance-claim history is also taken into account. With Geo-Fencing, we can target specific demographics including those with a certain credit score using our special targeting groups.
While agents often specialize in a particular category of insurance, some sell several different types of insurance. Agents can work for a larger insurance company or operate independently, selling policies from several different insurers. Ask what type insurance they sell and what steps they take to determine the right policy. That builds value and get’s them talking about what they do. With Geo-Fencing, we can promote the type of insurance they sell to the right demographics using our special targeting groups.
Almost anything of value can be insured to protect against loss due to a variety of circumstances. Insurance policies are very specific in the items they protect and in what event the policy holders will be reimbursed. Some of the most common insurance policies cover things we all use.
Millions of Americans drive a car to get from place to place each day, so it makes sense that auto insurance is one of the most commonly used types. In most states, the law requires drivers to maintain an active insurance policy on any car, up to a certain amount. Most car owners are required at minimum to purchase liability insurance, which protects against damage for which the policyholder is at fault. Liability insurance covers damage to property as well as any injuries sustained in an accident. It’s important to note liability insurance only covers damage or injuries of others, not the policyholder themselves. In addition to liability insurance, car owners can also purchase coverage for their own vehicle and medical expenses in the event of an accident. For this purpose, liability, vehicle and medical coverage are often packaged together in a single policy.
Insurance can also be purchased for other vehicles, like motorcycles, ATVs, boats or RVs, and generally functions similarly to car insurance. Policies for alternative vehicles may have higher premiums if they are considered more dangerous, or might include other coverage options specific to the vehicle. Many companies that provide auto insurance will also offer coverage for motorcycles, ATVs, boats and RVs. Ask if they offer insurance for other types of vehicles above so that can be promoted on the ad and targeted to the right demographics.
Your home, condo or apartment is probably the most valuable thing you own or otherwise pay for, so it makes sense to get it insured (Something that can be put on the ad). Homeowners insurance is important not just for the security of the house itself, but for its ability to cover possessions inside the home as well. Many mortgage lenders also require an active home insurance policy.
Like auto insurance, homeowners insurance is typically bundled together with policies covering many different items or categories of items. The primary coverage type is for the dwelling, insuring the house itself and all structures attached to it. Policies may also cover property within the home, with premiums varying depending on the value of all assets. Personal liability may also be included for damage or injuries sustained on your property that you are responsible for, much like auto insurance.
Property insurance also may cover certain major events outside of your control. These are known as perils, and may include fire, flooding, natural disasters and other catastrophic events. You may want to purchase insurance against one or more of these perils if you live in a high-risk area. Flood insurance is an exception, however, and can be purchased through the government-sponsored National Flood Insurance Program. Your lender may require this if you live in a flood-prone area.
To help pay for medical expenses, many people rely on their health insurance. With the passing of the Affordable Care Act, almost every American is required to enroll in a health care plan. Health insurance works similarly to other forms of insurance, although it is probably used to cover expenses more often, since car accidents and home damage are relatively rare compared to doctor visits and the need for medicine. Health insurance also operates on a premium-deductible model, and policyholders can choose what level of coverage works best for their lifestyle. For example, if you visit doctors very infrequently, you may consider a plan with a low premium and a higher deductible. On the other hand, people who require regular medical care may wish to pay a higher premium in exchange for more coverage from their deductible. Dental and vision care are sold as separate plans and are not required by law.
Travel insurance is available for individuals who want to protect against unexpected setbacks in the course of travel, whether it’s losing luggage or medical treatment abroad. Travel insurance may prove particularly useful for people who travel a lot for work or often visit remote locations. Travel insurance can take the form of either specific or blanket coverage. Specific coverage is useful for covering only certain risks, like medical emergencies or unexpected trip cancelation. Blanket coverage may cover some or all of your expenses for your entire trip.
Pet insurance is a relatively new product that may help cover the costs of
medical care for a dog, cat or other domestic animal. Medical care for animals can be very costly, particularly because insurance for them is rare. By paying into a premium, you can help offset the cost of unexpected emergencies as well as routine checkups and medication. While virtually unheard of a few years ago, pet insurance has become more popular as the cost of veterinarian care has continued to rise.
Umbrella insurance is extra coverage from liability for other insurance policies, usually home or auto insurance. Consumers may choose to purchase an umbrella policy if their home or car is more expensive than a typical policy would be able to cover. For example, most car insurance liability policies cover at least $25,000 per person or $50,000 per accident. But if the accident involves a very valuable car, or the victim is willing to pursue legal action, insurance may not even begin to cover the full cost. You may want to hedge your risk by purchasing umbrella insurance to add extra protection to your existing policy.
Ask insurance agents if they offer the above types of life insurance. Let them know with Geo-Fencing, we can promote all of the services to the right demographics using our special targeting groups.
Insurance Claims Basics
To receive a payout for an insurance policy, the policyholder must file a claim with the insurance company. The basics of the process are straightforward, but can vary depending on the type of insurance.
Claims Adjusters and Examiners
A claims adjuster or claims examiner is an employee of an insurance company, and the person responsible for evaluating claims and determining if the company will reimburse the policyholder at the amount provided. An adjuster inspects claims related to property damage, as in the case of auto or home insurance policies. Claims examiners are typically involved in health and life insurance, and review medical records to determine the proper payout for major medical procedures.
How To Make a Claim
Filing an insurance claim can be stressful and confusing, but you need to begin the process as soon as possible to make certain you can recover your losses. It’s important to note that in the case of emergencies, you should always call 911 first. The safety and health of yourself and others takes precedent over insurance.
Auto Insurance Claim:
If you’re involved in an accident, you need to call the police right away and have them document the situation. You can file a claim upon obtaining the police report. It’s also a good idea, if possible, to take your own notes at the scene. The most important things to record are what happened before the accident, the date and time, traffic signs in the area and road conditions. Also be sure to get the other driver’s name, address, license plate number and insurance information. Even photos taken with a cell phone camera can help the claims process. Once you have this documentation, call your insurance company right away.
Homeowners Insurance Claim:
In the case of damage, take pictures of the affected area as soon as any safety or health emergencies are resolved. Take note of what happened and all the relevant circumstances and report to your insurer as soon as possible. If any of your possessions were damaged, use an inventory of your important assets and make note of this in the claim. Once an adjuster has made their own report, review it for accuracy.
Life Insurance Claim:
Send your insurer a claim form for each beneficiary in the plan, as well as a certified copy of the policyholder’s death certificate. With the proper information, life insurance claims are generally straightforward. Problems may arise if the policyholder has died within two years of opening the policy. In this case, an attorney may be needed to settle the claim.
When it comes to claims, let the agent know that we can target specific demographics such as collision centers, homeowners with a senior in the household, people with a credit score over 700 and more to promote their services using our special targeting groups.
Insurance II: Insurance Products
Life insurance is designed to provide security for beneficiaries after a policy-holder’s death. There are numerous types of life insurance policies sold by insurance companies and some of them can be tricky to understand. Ask insurance agents what kind of life insurance policies they have and if they are able to assist someone who needs it.
A person should always start their policy or policies when they are young in order to lock in good rates. Premiums go sky-high after age 68 for men and 72 for women, and in some cases many insurers will not start a policy for an individual beyond a specified age. The insurer cannot cancel a policy if the insured has a heart attack, for example, but they are unlikely to issue a new policy to someone who has already suffered a heart attack.
Insurance should always be purchased from an A-rated or better insurance company. In 150 years, there has never been a failure to pay out a death benefit by an A-rated or better company. These companies have over $13T (T is for trillion) to back up their obligations. Use this to build value and appeal to the emotional side of the agent by talking about Geo-Fencing and how we can use this on their ad and target the right demographics with our special targeting groups.
Types of life insurance:
Term: Term life insurance is the most common type of life insurance and it is much like automobile insurance. Term life insurance has no cash value. You are covered while the policy is in effect, and if you cancel the policy or fail to make payments, all the coverage evaporates. All the money you may have paid into the policy up to that point is gone (this is a big part of how insurance companies make money). These policies usually have an expiration date of between 10 and 30 years and usually renewable with increased premiums. A buyer can ask for a level term policy in which the premiums stay the same for the life of the policy. This is a very good idea if a person is signing up for a 20 or 30 year term when they are in their late 30s or 40s. Usually a spouse can be added to a policy for about 25% extra for 25% of the benefit.
Typical monthly premiums for a 10-Year Level Term Life Insurance (as of March 2016)
Male, age 30, $500,000: $16.56 for nonsmoker, $59.31 for smoker
Male, age 45, $500,000: $34.11 for nonsmoker, $149.31 for smoker
Male, age 60, $500,000: $143.91 for nonsmoker, $590.76 for smoker
A smoker who lies about smoking will be discovered on autopsy (insurance companies require an autopsy), even if he or she quits 10 years before.
Whole Life: Whole life policies build up a cash value that the policy holder can borrow against. You can also use the cash value to pay premiums to keep the policy alive, exchange it for an annuity, or get a lump sum when the policy is cancelled. Whole life policies last a lifetime (policy owner’s lifetime). Premiums on whole life policies are fixed, benefits are fixed and the returns on the cash value are fixed as well, but the returns are low (usually between 2 and 3%). In general, an individual is better off getting a cheaper term life insurance policy with the same coverage and investing the difference in premiums themselves.
Universal Life: Universal life policies are like whole life policies, but premiums and death benefits can vary according to plan options.
Variable Life: Variable life policies are also similar to whole life policies, but there are many more choices available. A policy holder can choose form a number of different investment options. The death benefits and cash value will vary according to investment returns.
Annuity Life: With an annuity life policy a policy holder gives the insurance company a lump sum of money. The insurance company then pays the insured a fixed amount per year after a specified age until the person dies.
Ask insurance agents if they offer the above types of life insurance. Let them know with Geo-Fencing, we can promote all of the services to the right demographics using our special targeting groups.
Types of Medical Insurance:
Major Medical: This is the simplest type of medical insurance, but it also has the most number of options ranging from very simple to fancy. Ask the agent how many options of medical insurance there are and what are the differences. Major medical policies allow anyone covered under the policy to use any doctor or hospital they want. Major medical may or may not cover prescription costs.
There is almost always a deductible with a major medical policy. With major medical, deductibles may be imposed per incident and/or each year. Most policies will also have an out-of-pocket limit, which is the maximum amount the policy holder will need to pay themselves. For example, a certain policy may have an out-of-pocket limit of $20,000, so once the holder has paid $20,000 everything else is covered by the insurance.
Most policies have a lifetime limit that will be paid toward medical expenses of any one person on the policy (usually about a million dollars).
Medicare – State-run health care for senior citizens:
Medicare is separated into four major parts: Part A, Part B, Part C, and Part D.
Part A covers hospital stays and is automatically provided.
Part B covers doctor visits and outpatient care. This is a voluntary element of Medicare so seniors must sign up for it. As of 2018, the average cost per person on Part B is $110.
Part C is Part A + Part B along with a PPO plan with more benefits. This is also an element of Medicare that seniors can choose and costs vary. As of 2018, the average cost per person on Part C is $350.
Part D is prescription drug coverage. This is also a voluntary plan. Part D will be going through some major changes from 2018 to 2020 to help lower costs.
If an insured gets hurt and cannot work, sometimes having medical expenses
covered isn’t enough. Short-term disability will help a policy holder pay normal bills for a period up to six months. Typically, a short-term disability policy will pay out 80% to 100% of normal monthly income.
Long-term disability kicks in once the short-term disability runs out. If necessary, long-term disability can pay out for a lifetime, but will usually only pay around two-thirds of normal income. A long-term policy will often pay to retrain a person for a new profession that could be performed with the disability. Once new employment is found, payments cease.
Ask agents if they cover short/long term disability.
Insurance (Other than auto)
Mortgage. This is disability insurance that helps to maintain mortgage payments if a person becomes disabled or dies. Most lenders require this insurance in order to get a mortgage from them. Mortgage insurance payments are often lumped into the monthly mortgage payment.
Professional Liability. This type of insurance is typical in many of the major professions. For example, physicians, surgeons, and attorneys are required to have malpractice insurance in order to practice. Some states require contractors to have liability insurance, and there are other professions that generally safeguard their businesses by purchasing professional liability insurance. With Geo-Fencing, are able to target specific demographics that is appealing to the major professions using our special targeting groups.
Farmer’s Insurance: Affinity Program
Remember that a good hook for FARMERS INSURANCE is the AFFINITY PROGRAM (Up to 18% eligible for a variety of professions, teachers, law enforcement officers, firefighters, EMTs and paramedics). This is an occupational discount that they offer to HEROES for their insurance policies. Remember to use it to disrupt the pattern with the gate keepers and build value the the principal agents.
Use this as an opportunity to not only hook the customer but also to inform them of what our company’s mission is, to provide support to the Heroes of our communities. This can also be a way for you to learn more about any other incentive programs they offer and to just get a better understanding of the demographics they are looking to target specifically for their marketing.
Any other insurance company that you talk to potentially offers that occupational discount. So when calling make sure and utilize it for your advantage when calling various insurance companies. Again, use this in as way to learn more about what their marketing needs are and ways to hook the other companies in the insurance business.
Success Tip: Always remember that just about every adult is required to have some type of insurance and we are looking for insurance agents to guide our people through the process.
Keys to remember about selling to insurance agents:
- Insurance agents typically have a college degree and have basic knowledge of the finance industry (some insurance companies also deal with investments). You should have an understanding of different types of insurance so that they will recognize you as a knowledgeable caller.
- Insurance agents are patient and relatively well-spoken. Speak professionally and they will respond more professionally toward you.
- Some insurance offices will have a number of agents. In some cases, the lead agent (sometimes called “primary agent”) for the office makes marketing decisions, in others, individual agents can do their own marketing. In a few cases, an office manager will make advertising decisions. If you can build a good rapport with the “gatekeeper”, ask them if you can speak to whomever may be in charge of marketing for the office.
- Most large insurance companies like State Farm and Allstate will have a compliance department overseeing all marketing for the agents. Be sure to tell them that our art department will gladly work with their compliance department to ensure their requirements are met or exceeded. In some cases, our art department may have previously worked with their compliance department.
- In large offices, getting past the gatekeeper is important. They are there to ensure the agents only deal with business. It is also their job to be kind…use that to your advantage! Our objective is to provide the agent with advertising to the right demographics. (which is good for their business)
Insurance: Killer One-Liners
- With the experience you have, you’d be a perfect fit to help those in need of insurance, so why not market yourself to the right demographics?
- Some folks don’t really know that they can have cheaper monthly premiums bundling with one insurance company, so why not be the one to assist them on choosing the right one?
- People are always telling others about who helps them out. Working closely with the community can go a long way in increasing your public profile.
- We are looking for an agent who can assist someone in finding the right policy that will benefit them, is that something you can do?
- Insurance is an important investment for many people, and people need someone trustworthy and supportive to help make sure they are buying the right policies to safeguard their future.
- Doesn’t it make smart business sense to market to the right demographics using our special targeting groups?
- Insurance is an important investment for many people and they need someone trustworthy and reliable to help make sure they are buying the right policies to safeguard their future. With Geo-Fencing we can help you reach specific demographics using our targeting groups.