Are banks selling the simplified issue policies to customers who might not otherwise have bought traditional life insurance?
KK: For the most part these sales are being made to people who are uninsured or underinsured. The bank is doing them a service to get them insured and doing so in a way that the bank can make a little money at it. By having a low cost sales force of platform reps, banks are able to meet the needs of their customers who are otherwise being neglected by traditional agents. JM: How much does price come into play in a platform sale? KK: Probably not very much. At the point of sale, the platform rep is talking to a person who doesn’t have any insurance. Odds are he has not been approached about buying insurance by anybody before, so the customer is deciding whether to put some of his money aside for life insurance. The customer isn’t shopping. Rates may be important to the bank in deciding which product to use, because the bank is mindful of its reputation with the customers. It’s very careful about which insurance company’s products it uses and to make sure the company is sound enough to d
