If you are or currently in the insurance industry, we have all seen the ads on job sites..."wanted sales reps for insurance company, expected 1st year earning from $60k-$100k." Then you respond. Then they contact you and invite you in for an interview. They promise an entrepreneurial lifestyle, leads & training.
Then you show up for the "interview." It seems like an interview, starting out with questions about your experience noted on your resume. You're asked what your goals are, salary expectations and your current lifestyle. My favorite question you will hear, "what is the most you've made in one year." Two-sided question, one side of it is to see if you are a good producer which there is nothing wrong with asking someone that who wants a job. The other side is where I have my problem. The other side of the coin is to make you squirm in your seat. You have been looking for an interview and a job for awhile and you're excited and vulnerable at the same time.
You think you know where I'm going with us at this point but I am getting ready to shock you. Please be careful of insurance sales positions, and this is why. The conversation has been good, you've been complimented since you came in the door. Once the interviewer figures out you may be a solid and a good producer the script proceeds as an interview. But if you seem "green" or "wet behind the ears" that script follows like a flow chart that just hit a right turn.
You now are exposed. Let's say you've been laid off, fired or you quit your last place of employment. Chances are you had a 401k where you were. Chances you haven't tapped into as of yet and if you have, shame on you! The question about that 401k comes out.
What you are now in is a sales presentation as a possible candidate for some type of annuity. They wow you by saying, "take your 401k as an example, what I would do is roll that over into an annuity (which probably has a 8-12 year contract)." Perhaps the "interview" takes that right turn and it turns into the fact finding portion of the sales presentation.
The pot gets sweeter when they speak of a bonus of up to 10% for the rollover, which they will also tell you (and is true) that when you pass from the 401k to the annuity, the taxes will not be due on the money at that time...that's a good thing normally. So, if you have $100k in your account, minus the fees of withdrawing the money from the account, you will receive the bonus of up to 10% on the balance.
You actually start thinking, this is is a good deal. You are almost convinced that you can do without the funds for 8-12 years. You have also almost forgotten why you are there. Then you wake up, then you become upset you have been pitched to during the "interview."
Something you may not know is that insurance companies subscribe to these job sites and do actually have positions open but insurance sales positions are always available because usually most positions are commission-only. And as an estate planner who started out working for such a company before starting my own firm, makes your first couple of years on a commission-only pay scale can be quite straining to say the least.
The larger part of their goal is to lure people, who they think through qualifying questions, to sign people up for an annuity contract that has a contract and surrender charge period of 8-10 years. Cruel but it could be worse. At least they didn't steal or swindle the funds out of you. But in this profession, from what I was taught and how I was raised...this is unethical.
If you don't have a consistent income from employment and/or retired with plenty of savings you do not need an annuity of any sort. There is no gray area, this is unethical behavior and wrong. And in better terms this is uncool. The bottom line you don't want to work for someone who would do this. These people will also be the people who are responsible for paying you commission on your sales!
Feel free to contact most ethical insurance professionals and they will probably tell you the same. Run! If you are seriously considering getting into the insurance field, do your research on the company. Once you sign your name you will have no one to blame but yourself.
I hope this helps!
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