Today is the thirtieth anniversary of my insurance license being issued.
Time flies when you're having fun.
In May of 1991, I was 21 years old. To the right is what I looked like that year. I was a junior at Kansas State University at that time. I was living in a studio apartment at the Wareham Hotel on Poyntz Avenue, in Manhattan, Kansas. The hotel had been converted to apartments about a year or so earlier. I remember that I could pay all my bills without using a postage stamp since the phone company, the cable company, the electric company were all within one block. I could even vote and pay my property taxes next door at the Riley County Courthouse.
Side Note: Just don't ask those people at the Riley County courthouse to let you peruse the mortgage registrations. I was escorted out by police and verbally threatened by the Riley County Attorney simply for asking to look at what are public records. I asked him to put his threat in writing, but he never did. He knew that I knew he was wrong, but that's another story for another time. I found out later that what he did was a crime, punishable by serious jail time, a permanent bar from holding elected public office in the state, and potential disbarment. Also, they tried to prevent me from registering to vote. They failed at that, too.
There was a grocery store around the block from where I lived. Harry's Uptown was on the first floor, so I could go have a beer and eat dinner in a very nice bar without leaving the building. The Manhattan Town Center mall was two blocks away, and the Manhattan Public Library was two blocks in the opposite direction.
While I officially began my insurance career on this day in 1991, I'd already been helping my father recruit for over a year at this point. In order to process more potential agents, when he'd visit Manhattan he would book two interview rooms at the placement center. I'd skip class that day so I could interview some upperclassmen in one booth while he did the same in a booth next door. It's amusing when I look back at that now. Many of the upperclassmen recognized me from classes (or Aggieville), knew I was younger than they were, so the questions and comments were sometimes funny. I've seen upperclassmen endure flop sweat that's on par with any special effects used in movies. No joke. And by interview, my job was to essentially persuade them to take the LIMRA Career Profile, which was used by my father's company as a gatekeeper to weed out candidates they didn't think would produce. Statistically, a great tool that big mutual career companies used with faith bordering on religious fervor.
It is worth noting that almost all of the industry's greatest agents would have failed to pass, so I have little faith in these tests.
I was driving a 1978 Lincoln Town car because I needed reliable transportation. I paid $2,000 cash for that beast. I still owned a 1968 Ford Mustang that I was tired of repairing every month, so I parked it. I'm ashamed to admit how much money I squandered on that car. I also owned a 1960 Ford F-100 that simply would not die. I paid $400 for the F-100 in 1988 for use in my first business and sold it in 1995 for $400. Part of me wishes I still had that thing.
I started out as a "College Agent" with Principal Mutual Life, activating my "Career Contract" later that year. We were paid the same as Career Agents, but without any benefits, without any commission advances, and no "financing." All our commissions were paid "as earned" but I had to "bank" $2,500 in First Year Commissions before I would get paid (I still think this was a bad idea). They did pay me $400 that first month, ostensibly for the time I spent studying for my license and learning about the company's products. I remember they asked for that $400 back when I left Principal in 1996, but the home office attorney that sent me that demand letter had failed to read my contract that said that $400 was mine forever. Apparently, contracts signed a month after mine had an amendment that said that $400 was an "advance" subject to repayment when the agent quit. My contract did not have this provision, it just said I would be paid $400 after my first month. When I pointed this out, she got really mad.
I remember wondering where she went to law school. She signed her name using bright pink ink on her demand letter. I ended up not having to pay that $400 back. I'm sure my name has been on a list since then.
During my first year, I worked insane hours, often seven days a week, with no base salary or wage. I may not have arrived at the office before dawn, but I was often there until 10 or 11 PM on every Sunday through Thursday, dialing for dollars.
I asked my first sales manager to go with me on my appointments but ended up going on my first five appointments alone because he refused to work after 5 PM. All my prospects were booking appointments in the evening because they worked during the day.
My first application for life insurance that I submitted to the Principal was declined.
My second application with the Principal was declined.
My third application with the Principal was declined.
My fourth application with the Principal was declined.
These first four all had minor pre-existing health conditions of some sort. Nothing terrible, in retrospect. Knowing what I know now, I'd have been able to secure an offer for all of them with other quality companies. But I was a noob and didn't know any better. I was still drinking the freshman Career Agent Kool-Aid. Nobody I worked with suggested I try to get coverage through another company, so I just wasted all that time, earning no compensation.
My fifth application with the Principal was issued, but my first sales manager said something inappropriate during our joint appointment to deliver the policy and collect that first premium check. I know this because the client "free looked" that policy and sent it back that next week. She sent me a handwritten note suggesting I find a different place to work because my sales manager was, in her opinion, unprofessional. She must have felt bad because she sent me a $150 gift certificate for a local steak house to compensate me for my time.
I'd rather have had the commission, which would have been $1,500. I needed that money. I had bills to pay.
Over the next month, I had a dozen joint sales calls with my first sales manager that resulted in absolutely no sales. I might be having trouble with underwriting, but at least when I went alone I could get an app signed, and I really had no idea what I was doing. I started to agree with my prospective client about my sales manager. He sure didn't help me any.
I asked my father for help because my sales manager wasn't helping me earn a living, and I really needed some help. Dad's solution was to transfer me to another unit with a different sales manager. Problem solved.
I still have my "One Thousand Clients" book that was part of the Al Granum One Card System that the Principal was using at that time. I placed 17 life insurance cases my first year. For the record, none of those policies are still inforce.
The very first Medicare Supplement policy I wrote that year just lapsed last month (April, 2021) because my client died. There are two Long-Term Care policies I wrote with the Principal from that first year, and I know they are inforce because the Principal notified me last year that they were going to stop paying renewals even though my contract says I was vested for life on that product (another home office promise broken). I remember they were nice people, but I haven't seen them in 29 years. They got what they wanted, and had no interest in any other product or service on my menu.
I also delivered my first death claim on a policy I wrote that first year. The insured was 12 years old. She was killed in an accident six months after the policy was issued.
Nobody taught me how to handle a death claim. I learned that on the job, the hard way. This was a paradigm-shifting event in my life. It made me stop worrying about my commissions and start focusing on getting protection in place. Because all death benefits matter.
I delivered some other death claims that year. One was a group term conversion that I helped a prospective client with. I did as I was trained, I tried to persuade him to convert to one of the company's flagship products, but he had terminal cancer and could not qualify. So I helped him with the guaranteed conversion option, which was plain vanilla whole life. This paid me zero commissions, but I did it anyway. The premium was almost $1,400 every three months for $100,000 of death benefit. I remember the insured telling me that he'd told his wife to pay those premiums no matter what. He knew he was headed to hospice and soon wouldn't be able to manage the bills anymore. They paid two quarterly premiums, and then he died.
I remember hand-delivering a check for about $103,000 to his new widow and she had the temerity to complain about how expensive the policy had been. I was shocked. I explained to her that she had received most of the premium back since it was "un-earned" plus interest the company paid on the face amount from the date of death until the day the check was printed, which added up to essentially 100% of what she had paid.
She didn't care. She thought we had ripped her off. Her parting words with me was "I hate insurance companies."
Think about that for a moment.
The other claims I delivered were all orphan policyholders, which means their agent was long gone, retired, or dead, and the policy had been assigned to me for service. The beneficiaries were usually adult grandchildren, the insureds were usually in their eighties, nineties, or even over one hundred years old when they passed. The most common thing I heard when I handed them a check was something along the lines of "He lived a good life" or "She lived a long time." These beneficiaries never complained about the cost of the coverage, either.
Most of those old dividend-paying whole life policies were paid up decades earlier, and every single one of them paid a death benefit more than double the original face amount because dividends had been left with the company and used to purchase paid-up additional insurance. Some were triple their original face amount. That next year I paid a claim that was over $125,000 in death benefits, on a $25,000 face amount policy.
Dividends add up over time.
I attended the New Agents School in Des Moines that first year. The home office had stopped having a New Agent school in the mid-1980s because of some law in New York that had limited their ability to finance new agents, and that New York law applied even in other states. The home office slammed the door on recruiting for a year, and the effects of that error are still being felt today. If this sounds totally absurd to you, that means you're normal and probably smarter than average. My class was the first to attend this school after a lengthy hiatus.
In my very first home office school, we spent a week learning how to design financial plans using Financial Profiles+ software. This was before Microsoft Windows, so it was an old DOS program that you had to use the TAB button to navigate up and down the page to enter client information. I specifically remember that nobody teaching any of these classes had ever been an agent in the field. It seemed wrong then. I know it's wrong now.
The best part of the new agent's school was when I met with our life underwriters and found out that they all loved my father. Apparently, he was the only Agency Manager in the nation that never called and cussed them out for rating policies or declining applications. I mentioned this to him when I returned from school, and he told me he'd been taught that lesson by his agency manager when he was a freshman unit manager at Met Life in the mid-1960s.
Most of the better lessons in my business are passed down this way.
The funny highlight of this new agent school was when the only married agent in our class was called down to the hotel lobby by the manager so the "escort" he'd ordered from the yellow pages would be allowed by hotel security to get on to the elevator. Very scandalous!
We were taught in this school to have all our appointments in the agency office. Because that's what professionals do. Doctors don't make house calls. Lawyers don't make house calls. Career life insurance agents shouldn't make house calls, either. That's the home office theory.
That first week I was back, I diligently booked 30 appointments in my office. Exactly zero showed up.
The next week, I scheduled another thirty appointments in my office. One showed up. I remember this appointment vividly. She brought her toddler son with her. He ran laps around the conference room table while I struggled to conduct a fact-finding interview. At one point, the son sat on the floor and began slapping the doorstop while kicking the door with his boot. His mom did exactly nothing to curb this misbehavior. "Boing, BAM, boing, BAM, boing, BAM!" until the office manager bust into the room yelling "What the hell is going on in here?"
It's okay to laugh. This is just another day in the life of an insurance agent.
I didn't make a sale that day.
Two weeks, sixty appointments booked, one appointment kept, no sales. Just call me butter, because I was on a roll.
I made the executive decision to ignore the home office theories and methods. I went back to booking appointments where I went to see people where they lived and worked. I stopped doing two interviews to make one sale when one interview was enough. I quit using all the software that produced these financial planning "books" that no client wanted to read.
That's when I finally started making sales.
One day I was digging around one of the agency closets and found a VHS videotape of a presentation given at a local Life Underwriters luncheon by the late John Savage, CLU. In an hour, I learned more about selling life insurance than I'd learned from all the home office training material. I do not know why this tape wasn't played for new agents on their first day. I know why it would not be played today: The Compliance Department in every home office would never approve of it, even though he spoke the truth.
In 1991, the average price of regular gasoline was $1.14.
My apartment rent was $275 per month.
My cable bill was less than $30, but my telephone bill was at least $45, plus long distance. Remember long-distance phone bills? Sometimes they were in the hundreds of dollars.
The first major medical policy I ever sold had a premium of $17 per month. It had a $500 deductible, $2,000 out-of-pocket maximum, with a $1,000,000 lifetime benefit maximum. It was also guaranteed renewable to age 65, just like every policy I've ever seen in my entire career. It had a pre-existing exclusion rider for "testicular torsion." Just typing that out makes me squirm in my seat. I've heard this condition is painful. That exclusion rider lasted for 12 months, after which he'd be fully covered.
My contribution to the group health insurance through the Principal was $0.50 per pay period (about one dollar per month). It was an HMO which proved to be a problem when I wanted to see an allergy specialist. I switched back to the PPO that next year and my contribution jumped to $29 per month, but at least I could see a specialist without having to do battle with a primary care doctor that didn't want to give up his capitation fees so I could stop suffering.
My primary care physician earned north of $450,000 that year. I know because I quoted his Disability Income Insurance; I've seen his tax returns. I normally don't object to people making good money, but I was having bouts of 30-60 sneezes in a row that left me in pain, and he was being stingy with his referral power. He should have just let me see an allergist instead of giving me a steroid shot that resulted in a bloody nose that didn't stop for three days (I had to visit the Emergency Room to get my nose cauterized).
There were 314 new Career Agents in my freshman class. At the end of our new agent financing program, there were eleven of us left. When I left the company in 1996, there was one agent from my class that still had an active contract besides me, and he was an Agency Manager's son just like I was. I know he's since moved on, too. Probably for the same reasons I did.
When I started my career, there were 2,046 life insurance companies in the United States. Today there are around 760.
Prudential was the largest life insurance company back then, and it was a mutual company. Met Life was the second largest, and it was mutual. The Principal, where I started, was mutual.
None of those companies are mutual anymore. Met Life doesn't even sell individual life insurance anymore, even though it ended up being the largest life insurance company. You can blame Congress for that one.
The average face amount of new life insurance policies has grown substantially over my career. The average premium paid on a new policy has also grown substantially, even though the cost of insurance is about half what it used to be. The cost of coverage is lower now because people are living longer, outcomes from health problems have improved drastically, and underwriting (risk assessment) has improved measurably. I can write an affordable policy on someone that's HIV+ today. That was an automatic decline in 1991.
Interestingly enough, the policy sold count is essentially flat. My industry sells about the same number of new policies per year now as they did 30 years ago, even though our population has doubled. This is a shame.
When my father began his career, the average age of new insureds was around 22, which is about the same as it was a century ago. When I started, it had increased to age 37. Today, my average age of a new life insurance client is 51. I have companies that will issue policies all the way to age 90, but I don't recommend anyone wait that long. It's expensive and extremely difficult to get issued at that age.
I struggled those first few years selling life insurance. I had some successes, but also quite a bit of heartbreak and disappointment. But as John Savage said, "If you're going to fail, fail when you're young!"
and he also said
"All you have to do to make it...is last."
He was so right.
That sounds like such a long time.
I feel like it was only yesterday that I walked into the agency for the first time as a new agent.
Note: I wrote this yesterday, which was my thirtieth anniversary. I'm publishing it today because I had to take my fiancée to the emergency room before I was finished editing. Life is full of surprises and rarely turns out exactly as we planned. So take care of business today. Protect your family. Don't wait to buy your life insurance. It will never be cheaper for you than it is today.