Tweaking products sounds so innocent.
The tweaker will say, "The insurance company has just made a housekeeping change, that's all."
The listener nods understandingly.
After all, maybe it's "just" a change that brings policy language into line with similar products at the company; or a new name that follows a merger with (or takeover of business from) another carrier; or a feature that extends a benefit by a day or a dollar.
No need to race to the back room to do a tweak-over of the tweaks in the contract, right?
Wrong. Those little tweaks can make a big difference, not only in pricing but also in benefit to the client. Some may very well be innocent, but others might pack a wallop, both good and bad.
Here are some tweaks that have surfaced this year along with some what-to-dos:
o Upgrade to the 2001 Commissioners Standard Ordinary Table. That's mandatory, so tweaking to life products is expected. But what some life companies are doing is pulling the older products altogether and rolling out new ones. The newbies have more than pricing changes; some have new or revised underwriting classes; updated or missing riders; revised face amount ranges; and more. And a few are including "income" options or strategies–more than simple reminders about policy loan privileges.
Suggestion: Find out what exactly has changed from the old tried-and-true. As for those income options/strategies, it will pay to chart the differences as they come in, for what is billed as an "income feature" in one product might really be a death benefit feature, while another could be a strategy for outing the cash value in another policy.
o New wrinkles. This is common in health care policies, both individual and group. At renewal time, the carriers shave limits, features and add-ons; they bump up deductibles, premiums and underwriting qualifications; to offset that, they may offer little extras that may or may not have value to the customer. Much of this is being done in response to the recession and health care cost escalation. No one promotes these as big sweeping changes, but many times that's what they are.
Suggestion: Flesh out the changes, positive and negative, before ever talking to the customer about them. Have alternatives or gap-fillers in mind to recommend, if needed.
