Replace or Leave Them Alone?

One major carrier that entered the Medicare Supplement market last year initially had a very strict clause in their contract that they almost-immediately removed due to agent backlash. It said an agent could not, under any circumstances, replace one of their policies for at least two years.

There is also a major agency out there that recruits with a “free leads” model for Medicare Supplements that says that the owner specifically prohibits you to contact your clients that you've written, after you've written them.

He says in his agent contract that he believes it's in their best interest to be “left alone” and not bothered again by the agent.

“If they don't call you, leave them alone and they will stay.“

This is because the agent makes the majority of the first year commission and the agency only stands to make money in subsequent years.

Replacing the business would not benefit the agency at all.

I want to thank agents and agencies with that mentality for making my and my agent's business a thriving success. We replace policies where agents have written the policy and then completely disappeared with no follow up, whatsoever.

My conscience will not allow me to write a widow with a company that I know just gave a huge, unexpected rate increase and just let her stay there with no option.

Here are the alternatives:

1] Write the policy and hope and pray the senior never calls you. Don't follow up, just tell them it's approved and move on to the next prospect call.
After their big rate increase (year 2, year 4 – whenever) they will be waiting for a call to save money or will actively search for a replacement policy.

2] Write the policy and follow up at least 4 times over that first year. They will be a raving fan and often times tell everyone they know about this amazing agent that saved them $XXXX per year from where they were. When a rate increase comes, provide them the option to move, again reminding them that you're independent and not a captive agent.

This results in:
A) More Referrals
B) Reset of 6 year commission clock for residuals
C) Step up in basis (making commission on higher amount, still less than their proposed renewal was.

I have heard, thousands of times now, that the senior cannot remember the name of their agent. They've never heard from him (or her) after the initial sale. “They were all chasing me down when I was 65, then they disappeared and I just didn't know where to go. I'm so glad you all called!”

If you want to build a serious, residual income business, a focus on follow-up and a client retention strategy is a key component.
It's just good business to take care of those who have placed their trust in you to do the right thing by them.

Why even start to fill a bucket that has a hole in it?