No Agent for Life Insurance Policy- It’s Referred to as an “Orphan”

No Agent for Life Insurance Policy- It’s Referred to as an “Orphan”

What is a No Agent Life Insurance Policy?

Having spent considerable time in my early career courting no agent life insurance policy owners,or so called policy "orphans", I can attest that there are an awful lot of them. 

If you have found yourself or a loved one in the position where you no longer have a contact for the agent who sold you your life insurance policy and you have questions you are in the right place.  

Why Does This Situation Come About?

If you don't know your life insurance agent’s name and number?  Don’t feel bad, you’re not alone. LIMRA the life insurance research association, says about 8 in 10 policy owners are in the same boat. The life insurance carriers refer to these no agent life insurance  policies as "orphans".

This situation comes about due to the incredible turnover rate in the life insurance industry. Most agents don’t last more than a year or two before they decide to seek employment in a different field.

no agent life insurance policy lie a hamster on awheel

When this happens, the carrier assigns the now “orphaned” policy to a new young agent on the hamster wheel. If this new agent turns out to be a longtime employee of the carrier, you may be in luck…but the odds do not favor your chances.

I​n addition to young agents deciding to try their luck in a different field, the carrier will also enforce exclusivity/non-compete rights. This prevents a career agent who is switching companies ( or going independent) from servicing your life insurance contract.

I know this from personal experience, having left a well known national carrier and having to tell my clients I couldn’t help them with service issues.

Key Take Aways

  • 8 out of 10 policy owners don't know their Agent.
  • So called "orphan" policies are assigned to the newest agents.
  • If your Agent leaves to work for another carrier they will not be allowed to service your policy.

Call Centers Help Create The  No Agent Life Insurance Policy 

​Because consumers want to be able to compare rates, national call center brokerages like Select Quote or Matrix Direct have gained market share.

For consumers, this is a mistake as all agents use the same rates published by the State Department of Insurance. An independent agent will compare rates and service your policy for you.In fact ,many independent agents will offer far more selection than the national call centers.

​If you were sold your policy through a call center like Select Quote  you have no servicing agent. If you have a question or would like to make a change the carrier’s 800 number and bad call waiting music are in your future.

In exchange for a great deal,  that might be worth it to you. However, no trade off is necessary to get the best possible deal.

My Policy Has No Agent- What Do I Do?

If you find yourself in the situation described above, that is, as the owner of a no agent life insurance policy, you should contact an experienced independent agent.

Most  Independent agents will be willing to  review and service your policy for you.

This is important because, an experienced servicing agent can help you with the following issues:

  • Make basic administrative changes to the beneficiaries, coverage amounts, and payment methods.
  • Help save you some moolah! If your health has improved or you stopped smoking for instance there is a real chance of improving your situation
  • Let you know what you need to do  (like how much weight to lose) to reap the rewards ($$$$) spoken about above. For more on this subject follow the Preferred Best Project.
  • Keep you informed about conversion opportunities. This is really important if your health has slipped since you took out the policy. Conversion to permanent insurance requires no health underwriting.

Key Take Aways

  • Call center brokerages do not service policies they sell. 
  • Improved health and lifestyle may result is big savings.
  • Knowing your conversion rights is particularly important if your health has slipped since taking out the policy. 

Your Policy Needn't Remain an "Orphan"

If you have a life insurance policy that has not been reviewed in the last year you may be missing out on the opportunity to save money. Having an experienced independent agent review and service your policy is the best way to insure that you are getting the most out of your policy.

​We offer to review our clients policies on an annual basis and walk clients through the process -should the opportunity arise to save money or otherwise improve upon the situation.

​Additionally we are available to answer questions and help with any changes they would like to make. If you have purchased a life insurance policy and have not heard from the agent who sold it , we would be pleased to review it with you.Just click here and drop us a note.

James Tobin, CFP
 

Jim Tobin is the owner of Life Insurance Help Desk, a Fairfield County, CT. life insurance agency. You can find him on Google + and Facebook. Over the past 10 years, Jim has used his CFP-financial planning designation to help individuals with their life insurance needs. In addition to working with life insurance clients, Jim teaches ESL classes in his spare time. He resides with his beautiful wife Nicole and the 3 cats that rule their lives..