|
How ERISA Can Help You Make The Sale
How often have you heard the
objection “I have a policy through work”?
Your prospect may naively
believe that the insurance policy provided by their employer, or that
they pay for themselves, will pay a claim just like the policy you can
offer. This is probably because they don’t know about ERISA.
ERISA, an acronym for the Employee
Retirement Income Security Act of 1974, is a federal law that was
originally intended to protect the retirement benefits of employees
against mergers, acquisitions, and other corporate activities that might
otherwise have endangered such funds. As interpreted by the 1987 U S
Supreme Court decision Pilot Life v. Dedeaux, ERISA has barred
litigation against an insurance company for the manner in which they pay
a claim, or if they deny the claim. You read that correctly: under
ERISA the insurance company is the ultimate decider on whether they pay
a claim or not.
State insurance departments have the
authority to investigate whether insurers doing business in their state
are violating unfair-practice laws. These investigations are called
"market conduct studies." If a study is conducted and if a company is
found to be engaging in illegal practices, the department has the right
to fine the offending company; however, these fines are normally not a
very effective deterrent because they are small in comparison to the
claims amounts in question and, most importantly to the insured, the
insurance department has no authority to sue on behalf of the insured.
The insured can not turn to the Feds
for relief because the 1945 McCarran-Ferguson Act prevents the federal
government from enacting any form of insurance consumer protections.
Amazingly, out of the millions of pages of federal statutes, codes,
guidelines, requirements, and standards; no provision, sentence, word
regulates insurance practices.
Wow! Who knew? But how does this help
me make a sale?
Carefully consider what you have just
read: if your prospect has a life, health, or disability policy they
obtained through their employer, the insurance company can deny the
claim and there is almost nothing the insured can do about it. What is
the value of that policy now?
Since all objections are either trust,
value, or need (a complete explanation of objections and how to overcome
them are available at
www.lifeleads.net); the need objection no longer exists, and the
value of your services should have increased. If your prospect trusts
your explanation of ERISA, a sale should follow.
About The Author
Mr. Osman is the pen name of a nationally
recognized award winning life insurance Master General Agent and
consultant and has been developing life insurance leads and teaching
closing techniques for almost twenty five years. Contact him at
LifeLeads.net (605-362-2576) or at
eric@lifeleads.net.
Copyright Eric Osman © 7/10/06
|
