Complaint Review: Insurance Companies - Internet

A few days ago, I read a Rip-Off Report about sales positions with insurance companies.

The man had attended a "hiring Event" where mass numbers of job seekers get together with the hopes of finding a job.  He called it a "scheme."  That stuck in my mind since I read it.  "Is it really a scheme/"

Today, I pulled out my dictionary to see if these hiring seminars are in fact schemes.  Here is what I found:  (in part)  Scheme:  "A plan, a purpose or Plot, often with The suggestion of trickery."

The question becomes:  "Does this describe the insurance industry and these mass hiring events?"  I say "absolutely!"  The insurance industry recruits on what I call the "Warm bodies/Get Lucky philosophy.  That is, get as many warm bodies as possible and maybe we'll get lucky with a few.

Where is the trickery you may ask.  of 100 people who buy into the plan, between 70 and 92 will be unemployed again within a few months.  They do not tell the attendees that.  They do tell about the vast sums of money a very few make.   For instance, when I was recruited into the insurance industry, I was told of an agent about 100 miles away who was making $400K per year.  Was that representative of the earnings in my district?  No, absolutely not.  That was part of the trickery.   It reminds me of a job I once took.  When I was being recruited, I was shown the sales figures of a representative that indicated I could make $400K per year.  Only after going to work for the company did I discover that rep worked for a different company and was in Southern California, a very different market from North Georgia.  I was the top sales rep in the Atlanta office and was struggling to make $20K per year!  Qute literally, I couldn't pay my bills despite being the top rep for the company!

I asked about a salary and was told "Yes, there is a small salary."  In fact, there was no salary at all.  That was also a part of the trickery.

I asked about training for the job.  I was told "Yes, we have the best training in the industry."  In fact, the training was virtually nothing except for riding along with another agent.  That's like sitting a highschool football player in front of  a televised football game and calling him watching television "Training" expecting him to be successful in the pro leagues.  It's pathetic training.  This from an industry with a product that is difficult to understand and sell. and with vast numbers of hopeful people.

They also don't make it clear that you will be considered an independent contractor,  This is what "agent" means.  You are not an employee of the company.  This means that if you are successful. they will not have "withholdings" taken from your paycheck.  In the next taxable year, you will most likely have a huge tax bill.  You will also not qualify for unemployment when you almost inevitably lose your job as an insurance agent.

The insurance industry very much remind me of multi-level marketing schemes such as Amway and others.  It has all the hallmarks.  Sales managers are required to recruit new sales people into the scheme as it is with multi-level marketing schemes.  They get a percentage of the sales of those they recruit as it is with multi-level.  They lure you with examples of people who have been uncommonly successful as it is with multi-levels.  They well know that your chances of this type of success is very small (2% or maybe 3%)  They know that the vast majority fail to make a living at the endeavor.

In multi-level marketing schemes, it is quite common to show photographs of people in front of their luxury homes or luxury cars or yachts suggesting you can also earn these rewards.  The insurance industry does not typically show photographs but they do tell you you can make hundreds of thousands of dollars a year suggesting you can have a mansion or luxuries that few obtain.

Is the insurance industry a scheme?  It certainly fits the definition.  If the shoe fits, wear it!

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