"Twisting Insurance" by Steve Krantz describes a new approach to rebating: Disadvantage vs. Advantage. Most people in network marketing believe that they should take advantage of every opportunity to promote their business. And that's why most network marketers are constantly rebating against anyone who will bite. The belief is that by sending out, multiple rebates offers, their network of prospects will increase, and their income will skyrocket. I want to take this opportunity to explain what I mean by that.
But is this a fair trade practice? How does sending out a bunch of rebates regularly actually harm your business? Well, let's examine the concept behind "twisting insurance." You're paying the majority of your commissions anyway, so why should you even bother to market your business? It's a lose-lose situation. If you send out an entire contract of rebates, you're just giving your sales team cash for their efforts.
Now let's examine the situation when twisting insurance occurs. When a network marketer sends out many rebates, it looks as though they've made some investment in their enterprise. The incentive seems to be to consistently churn out many rebates because that's what you do in your business. The problem with this strategy is twofold.
First, most insurance agents are taught to continuously churn out a specific percentage of insurance policies that they'll promote to their sales representatives. In other words, "you do what I say; you get paid." The second disadvantage is that by twisting your insurance company, you are, in effect, giving that company or broker the power to dictate how much you receive from them. In other words, by signing up for more insurance policies than you need, a network marketer essentially gives the insurance company an unfair trade.
Now let's examine the second reason this rebate twisting can be considered an unfair trade practice. The primary reason is that a rebated rebate only appears to have been awarded to you because you've requested it. Most people don't ask for a refund. The act of ordering one automatically gives the insurance agent the right to provide you with one. Now that I've explained how the practice of twisting works let me explain what you need to do to avoid being victimized by it.
The third thing you can do to avoid being victimized by twisting is never to purchase any life insurance policies from any agent representing J.D. Powers and Associates or any other company that has been in the news for having a lot of consumer complaints against them. It would help if you remembered that these people are in the business of selling insurance frauds and scams. And if you ever happen to make a connection with them, you can kiss any hope of building your cash value leads program goodbye.
The fourth thing that you should be very cautious of when you're looking to build cash value leads with twisting is the concept of combining the death benefit and the cash value policy.
You may have heard that this is an excellent way to get around annual coverage exclusions. But did you also know that some life insurance policies have death benefit clauses that severely limit the amount of cash value that you can earn on a policy? These clauses could make it impossible to achieve any real money on a cash value policy even if you wanted to. So be careful of any agent who tells you that you can get around these issues by getting both the death benefit and the cash value on an all-cash value policy. If it's legal, it's probably unethical.
What should be your focus is earning more money than you spend. If what you hear about the twisting of the rebate means that you can significantly increase the amount you're paying for coverage while keeping the same level of coverage, then go for it. Otherwise, keep working within the limitations of the insurance business and let rebates and bonuses do the talking. Your goal as a self-employed, direct sales agent is not to become the largest provider in your state but to be the largest insurer in your state.
0 Comments