The insurance industry can be an unpredictable and confusing place; that is why so many agents, brokers, and underwriters will encourage you to take out auto insurance that twists your arm and feeds you false information about rate changes, discounts, premiums, deductibles, and benefits. It's simple: if an agent or broker tells you that a lower deductible will save you a lot of money on your policy, they are probably telling you something. The truth is that the agent is probably just trying to get you to sign on. This is a common mistake because twisting quotes aims to create confusion, not give you the best rates possible.
Let's look at an example of what I mean. Suppose you have an old life policy that has a cash value equal to its current market value. You decide to purchase a new life policy with a much higher death benefit to replace your existing policy. You get a great price because you've twisted the numbers a bit.
Now suppose you call the state insurance department to tell them about your situation. The person who answers the phone wants you to realize that the new policy you're buying will cost twice as much like the one you have right now. Of course, this is a lie, but an agent representing your state insurance department will tell you this when you apply for your new car insurance. If you don't ask the right questions to find out the truth and tell the state insurance department the truth, you may never find out.
Another example: suppose you're working with an agent who offers to "match" your current policy with them. Matching means that the agent agrees to cover the same deductibles, premiums, and other benefits that you currently receive. If you're lucky, you'll get a lower rate than you're now paying. If you're not so fortunate, you could end up replacing your policy with much higher deductible and premium payments.
Some states require their agents to promise "twisting insurance" on any life insurance policy sold in their state. Simply put, this means that the life insurance company or agent will take whatever they can from you to make a profit. For example, if you don't have enough money and the state requires you to purchase a specific coverage, the company will often "twist" the rate to match the national average to make a profit.
While this is an illegal practice, it's still happening a lot. So what can you do? You can tell your state insurance department about your concerns. They may be able to help you put a stop to twisting insurance policies.
If your state insurance department can't do anything to help you, then call consumer advocates and your local better business bureau. These groups will tell you about abusive agents or who are simply wasting time by twisting your policy to make a profit. And you can warn others about these agents by making them known online and through other advertising methods such as flyers, letters, and even online forums.
Before you sign any agreement with a new life insurance company, ask for information on their agents. If you already have a policy with an agent promoting another company, call the agent and ask him about their involvement in twisting your policy. Ask him how much they are getting paid for this activity and another policy owner who the same agent has suckered. Tell them that you will not tolerate this behavior.
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