Unedited 3/13/09 |
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Migrating the Terms of an Insurance Policy or Contract
Migrating terms refers to a clever way to dilute the value of an insurance policy or contract. It is a quick way a business makes a profit. There are two aspects too this 1. Intentionally migrating the terms or 2. Migrating the terms due to the lack of due diligence, carelessness or over optimizing profits. Insurance agents are a continual problem in this area. A businessman might spend considerable time finding the right agent with the right policy and terms. But, come time for renewal the agent switches policies and tells the client everything is the same as the old policy. But, the old policy had specific terms to fit specific needs of the businessman at an additional cost. Since many policies are sent out from the underwriter after the policy term has begun, the client is unaware that changes have been made. Moreover, since the policy is received on the backside of a deal its arrival is put in a stack of papers to be addressed. This might incur a couple weeks wait. So, a client can be a month into the policy before he discovers the agent has diluted the terms of his policy. A significant amount of mitigating terms by insurance agents can be attributed to profit "maximizing” strategies. Here the agent takes on more work than they can reasonably handle and be duly diligent of the needs of each client. The result is a high amount of errors and omissions in the agent's policies. The agent turns a high profit but the client gets a policy of diluted value. Note:
Copyright 2009
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