Press Room (Recent Articles)

Technology Revolution Benefits Agents

Contributed by Brian R. Bulakites, CLU

No paperwork, instant underwriting approval and reduced expenses. Does this sound too good to be true? Not only is it feasible, it is already available.

With the new Internet based technologies in place, life insurance agencies are dramatically changing the ways they take applications and process new business. By using the latest technologies, insurance agencies are now able to:

• Provide instant underwriting approval and faster commissions
• Eliminate paperwork
• Eliminate errors, missing information and signatures on applications
• Provide protection in the event of a consumer complaint or legal action.

To appreciate how far we've come, let's look at how the application process has been handled for decades. An agent takes an application. The paperwork is copied and mailed to the home office, where a new business case is established. The applicant's medical records are received and reviewed. After the application is approved, a policy is issued and mailed to the agent or applicant. Once considered an industry standard, this approach is now outdated.

21^st Century Approach
Companies have developed various technologies to make the application process more efficient. Some companies use "voice signatures," while others use "electronic keypad signatures." Some systems start with an application, taken on paper and mailed to the home office; others use an electronic upload to the carrier's administrative system. Some systems have the agent ask the medial questions; others outsource this to an outside party.

One system uses an electronic application that is sent to the home office via the Web, making use of a secure Web platform absolutely critical. Once the agent closes the sale and reviews the required state disclosures with the customer, he or she places a call to a call center. A call center representative then completes the entire application with eh client and keys the information and answers to the medical questions into an electronic application.

The entire conversation is recorded, and a "voice signature" of the client is taken. The conversation is stored electronically and can be retrieved if there are future questions. The system then queries the Medical Information Bureau (MIB). Using the MIB information and the answers to the medical questions, the system either validates the medical information provided or sends it to the home office for further review. With the appropriate medical questions answered "no," and MIB validation, approval of the application takes place during the phone call. In the meantime, the system is validating the client's premium payment information.

Not only do agents benefit, but so do their clients.

Agency Benefits
Perhaps the most apparent benefit to the agent and agency is the instant underwriting approval, not to mention the more rapid payment of commissions. In addition, many agents appreciate the fact that they do no have to complete the application for the client. Most electronic application systems will not process an application that has missing or incomplete information. It eliminates applications that are returned to the agent for the reasons previously mentioned, plus there are no amendments for signature on delivery.

There also are some "hard dollar" savings for the agency. In the past, agency management loved to see stack of applications for review, but often disliked dedicating the time needed to review each one of them. With an Internet-based system, there are no applications to review, copy or mail to the home office. Since many agencies use overnight or two-day mail, this cost savings can be significant.

One often-overlooked benefit of the Internet-based process is the fact that the "not taken" rate is usually reduced dramatically. Instant approval, coupled with rapid policy issue, means that the policy gets delivered substantially faster than with the traditional procedures. Additionally, the initial premium is paid via Electronic Funds Transfer or credit card at the time the application is taken. This procedure combines to reduce the opportunity for "buyer's remorse" to set in. As a result, the client is more likely to keep the needed coverage and the agent is more likely to keep the sale.

Have you ever been subject to an unfair consumer complaint? Systems such as this provide protection against such unfair claims. The carrier retrieves the recorded conversation, which establishes exactly what the client was told during the completion of the application. Additionally, the voice recording documents the answers the client has given to the medical questions. This is especially useful if a client dies during the contestable period.

Client Benefit
It is well-documented that applying for life insurance can cause anxiety on the part of the applicant. The traditional process for handling applications leaves the client waiting days, or event weeks, for approval. A state-of-the-art system, which often provides instant approval, can alleviate the anxiety. The reduced "not taken" rate means that the client is more likely to keep this much-needed coverage.

A sales revolution is underway in the life insurance industry. If you're dealing with an insurer that puts you on a paper chase with each new client, it might be time to find a new partner. Those insurance agencies that take full advantage of the 21^st century, Internet-based technologies to streamline their application processes and reduce their expenses are certain to lead the industry in client sales and satisfaction.

Brian R. Bulakites, CLU is a National Accounts Sales Vice President for the Baltimore Life Companies, Owings Mills, MD. He is responsible for the recruitment and sales management of independent marketing organizations that specialize in the distribution of senior life products. Brian is very familiar with the electronic systems such as those described in this article. He can be reached at (800) 628-5433, extension 6637 or .