What Kind of Shopper are You?

There are two types of mental actions that we primarily use when making decisions about most anything we do or buy. In general they are one of the two following ways: Either we use emotions and sentiments (E&S’s) or knowledge and understanding (K&U). Which one do you think the advertisers rely on almost exclusively when seeking to get you to make a buying decision for a particular product?

Just think of the advertising for soft drinks. “Pepsi hits the spot” and “the Pepsi generation” are old slogans you likely recognize. The TV ads showed attractive young adults playing volleyball at the beach. The association with the good times, youth, and vitality was very powerful. Never mind the fact that the consumption of soft drinks, especially colas, can lead to all sorts of adverse health effects. For more details about the latter, please refer to my archived Newsletter #9 and Newsletter #13.

There’s little controversy left concerning the fact that smoking is a really bad thing for one’s health. That should be obvious, as sucking smoke containing dozens of carcinogens into one’s lungs year after year inevitably leads to all sorts of health problems. However, despite what would appear to be common sense, the macho Marlboro man and the feminist Virginia Slims woman sold billions of dollars’ worth of cigarettes.

In light of the fact that buying and drinking soft drinks is literally peeing one’s money down the drain and smoking is literally burning up one’s cash, how do advertisers convince people to make these purchases? It’s real simple; they appeal to one’s emotions and sentiments. In spite of all the logical reasons for declining such purchases, people continue buy them anyway. The truth is, emotions and sentiments are a far more powerful motivator than knowledge and understanding. This is so much the case that people’s E&S’s often override any common sense whatsoever. The ad designers, schooled in the art of advertising psychology, are well aware of this and are experts at manipulating people’s emotions in order to get them to think and act a certain way.

Just walk down the grocery store aisle containing laundry detergents. There are enough exotic designs and swirls to dazzle anyone’s imagination. A plain white box that says, “Tide Laundry Detergent” in black, block letters does not have the sensory stimulation as does Proctor & Gamble’s real thing. This sensory stimulation is part of the appeal to one’s emotions and sentiments. The product designers know this, and where appropriate, they take full advantage of this technique.

The case is just as true when it comes to the promotion of Medigap insurance or Medicare supplements. However, a different set of emotions and sentiments is targeted. Obviously, the advertisers are not pushing the Pepsi generation or the Marlboro man, so what E&S’s do you think they hit on?

Let’s see, seniors want to have the confidence that their Medicare supplement company is solid, trustworthy, and will pay its claims. One national organization uses this approach in their TV ads for their Medicare supplements. Speaking somewhat melodramatically, their voice-over commentator makes this emotional appeal to you the viewer: “You have your Medicare health insurance card and our I.D. card; you are now set!” From the standpoint of an appeal to a person’s E&S’s, these ads are powerful and extraordinarily well done. You’ll notice in this example there is no mention at all of being competitive or getting the best buy.

In print advertising, including mailers, some insurance companies make an implicit claim that their product is somehow superior to others. They extol their benefits as if somehow, their plan is uniquely better. Their graphics, color schemes, and advertising copy are carefully orchestrated to give you the reader, the impression that these are the people you can trust.

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During the appointment the agent doesn’t mention the card at all. But if you do inquire about the “under $50” product, he says, “Well really, that’s (meaning the high-deductible Plan F) not that popular of a plan. Most people want more benefits and get Plan F.” If you haven’t guessed it already, this technique is called bait and switch.Some mailers definitely push the envelope on ethics. Here’s a piece I picked up from a home a couple years ago. Hmm, a Medicare supplement for less than $50? The promoter of this oversized postcard wanted to appeal to a person’s sense of “getting a good deal”. Don’t we all love bargains! This company ostensibly promoted their high-deductible Plan F, which statistically, zero percent of the Medicare supplement shoppers buy. So yes, the real objective of this card was to get people to ring their 800 number and to get their agent in front of people.

I should add that whenever a mailer mentions a Medicare supplement rate, most all states’ insurance departments require the company to specifically state the exact rate and which plan that rate references. There can be no ambiguity allowed whatsoever, as there must be full disclosure. The state where this first card originated is an exception to the general rule.

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This second specimen is an example of a full-disclosure postcard. You’ll notice that the plan letters and rates are clearly displayed. The fine print at the bottom of the card discloses the legal form numbers for each plan mentioned (red arrow). As it states just the facts, this card is straightforward in its use of K&U. There is no appeal to one’s E&S’s. It exemplifies a fully compliant advertising piece. The agent that mailed this card is simply saying, “Here is a company I represent, here’s their rate, and here’s my contact number.

As an aside, there is something else very instructive to learn here. Notice that the difference at age 65 between their Plan F rate, $139 per month, and their Plan G rate, $111 per month, is $28 per month. $28 times 12 months equals an annual $336 more to buy their Plan F. All you are getting for $336 is a $147 (in 2015) Part B deductible benefit. Do your E&S’s tell you that you have to get Plan F, or does your knowledge and understanding suggest that Plan G, in this situation, is a better buy?

In another mailer the advertiser makes an interesting assertion: “Helping you with the High Costs of Medical Care”. Their appeal to your E&S’s is to get you to think that they are on your side. The brochure is well done as far as the copy and printing goes. The only problem with this piece, however, is they are making things worse because they attempt to sell you their high priced Medicare supplement. I wrote about this company in my document, Ten Dishonest Tricks of Unethical Agents.

How do they entice people to pay for their non-competitive Medicare supplement products? Simple. They train their agents to push people’s emotional buttons. They’re experts at pandering and manipulating. Unfortunately, there are enough gullible people who fall for their hype, as this company is still around. Once you expose their agents for who they are and what they do, they run like scared cockroaches.

To assist people in combatting this promotional nonsense, I wrote the Ten Medicare Supplement Shopping Mistakes. To listen to this fifteen minute audio presentation, please click here. In Mistake #1 we learn that the plans are standardized. Therefore, any company’s Plan F will have identical Medicare benefits to any other Plan F. So, if Brand X claims the virtues of their plans, you can substitute Brand Y or Z, instead. You can rest assured that the benefits are identical. The only exception is that a couple of companies may offer a dental & vision or a health club benefit, but at a higher premium.

Not only do companies push people’s emotions and sentiments button, but people do it to themselves. How many times have I heard people say, “Do they pay?” Initially, that’s a good question, especially if a person has heard about the war stories of some under-65 health insurance company not paying their fair share of their claims.

That’s why I wrote Mistake #2, which is thinking that a company will not pay its claims. They all pay their claims, even the ones that use questionable marketing ethics. They are mandated by the state insurance departments to do so. Even after I have put this information in people’s hands, some have still persisted with their doubts and fears (E&S’s) about a particular company not paying its claims. If still in doubt, they can contact the consumer affairs office at their state insurance department regarding the complaint history of any company. There may be an infrequent billing error, but rest assured; the companies, all of them, pay their claims!

All of my Ten Mistakes are based on knowledge and understanding. This is to assist you, the shopper, to make the best buy for your situation. A good working knowledge of these Ten Mistakes will help steer you to the use of your K&U faculties rather than relying on E&S’s. Unfortunately, there are those people, even when the facts are dropped in their laps, who still persist in spending sometimes hundreds of dollars more per year than they need to.

Why does this occur? I think it’s mainly due to the fact that some people let their emotions and sentiments drive most of their decisions. These tend to be the people who are willing to spend a dollar on gas driving across town to save a dime on a bag of sugar! It is also my observation that these are the types of people who are buffaloed by the slick-talking agent that is fully aware of this situation and uses emotions and sentiments to pander to them.

Much more could be said about this aspect of human psychology, but that is beyond the scope of this article.

Take a Quiz

To assist you in determining your shopping type, I have developed the following quiz. The following are statements that I have heard people say over and over. Mark “A” if you believe the statement is based on emotions and sentiments, and mark “B” if you believe the statement to be based on knowledge and understanding.

Quiz Time!

Characteristics of a Pro-Agent

What to look for when shopping for an agent:

  • Look for one that is knowledgeable about his subject. You can ascertain this by looking at the contents of his website, his newsletters, his seminar information, and any information he provides to you.
  • Choose an agent that works with a large number of Medicare supplement companies. Usually, the more the better.
  • Look for an agent that is patient with you and is willing to take the time to explain things to you in an understandable manner.
  • Look for the agent that is willing to put everything on the table, including any downsides to any plan that he is discussing.
  • Go with an agent that you feel comfortable with and demonstrates ethics in his practice.
  • Look for an agent that you perceive cares about you, your situation, and will be there year after year to continue to guide you through the Medicare maze.
  • Look for the agent that makes it easy for you to get in contact with him.
  • Go with an agent that gives you sound reason or basis for making a particular decision.
  • As always, testimonials or references never hurt.


Avoid these kinds of people:

  • Agents that disparage another company, especially by making any hint or innuendo that they may not pay their claims or will go out of business. Those agents don’t have that particular company in their briefcase, so they attempt to drive a wedge between you and that particular company. They suggest that you pay a higher premium for no reason at all other than for them to make the sale. Agents like these also tend to badmouth other agents.
  • Agents that are single company agents or SCA’s. For more background, please refer to my online document, Dishonest Tricks of Unethical agents #6.
  • There are exceptions, but usually it’s best to avoid agents in big box stores. Too many people have gotten bad advice or made hasty decisions only to regret it later. A good agent will offer to meet with you later in a quiet place. He will not be in a hurry!
  • Agents that pander to you.
  • Avoid property and casualty insurance agents. Their specialty is auto and home coverage, crop insurance, or commercial lines, but they do not specialize with Medicare products. They may carry a company or two, but usually that’s about it. Do you see your urologist when you have a heart problem? Probably not. Unless you want to pay more than you need to, don’t fall for their “let’s get it all under one roof” company line.
  • When pressed, agents that can give no reason or basis for a particular recommendation other than to say, “I think it’s a good idea, or this is a good one”.
  • The commission chasers. This is very common. Agents will pass up showing you a more competitive plan because it doesn’t pay as much commission compared to a more expensive one. Please refer to Dishonest Tricks of Unethical agents #1 and 2 for more information.
  • Agents that appear to be uninformed, make off-the-wall statements, or make erroneous assertions. Likewise, be very wary of agents that make vague or unsubstantiated statements.

In conclusion, finding a professional agent helps you to not only avoid Major Mistake #3, but also to avoid the first two Major Mistakes.

Selecting a new policy or changing to a different one doesn’t have to be a scary process. A good agent will hold your hand and walk you through the entire process step by step. The result will be that you will have the confidence that you made the right decision and ended up with the right policy or plan. If you are replacing your existing Medicare supplement, you will have the peace of mind that your new plan is every bit as much as the one you have, but you will be paying less money.

Major Mistake #2

The second major mistake is contacting numerous companies via their 800 numbers.

Recently I spoke with a gentleman, Sam, who was looking for a Medicare supplement. He then mentioned that he was also interested in a Part D prescription plan. He told me that he had received a brochure from company Z and called them for information.

I ran his meds on Medicare.gov, and sure enough, another company was a substantially better buy. The customer service rep (CSR) for Company Z could only promote her company and explain how their copays worked. As far as the rep goes in this situation, it’s like someone trying to sell you a shoe that doesn’t fit. If the shoe is too tight or hurts your foot, you know that right off the bat. In the case of a Part D prescription plan, you won’t know that until you run your meds on Medicare.gov. For Sam, calling the 800 number was a needless diversion and a waste of time.

In another situation I met with Linda. She explained to me that because she was in a hurry, she had called an 800 number from a brochure she received in the mail to sign up for their Medicare supplement. Linda continued by telling me that one of the first questions the operator from Company Y asked her was, “Do you smoke?” She admitted to having an occasional smoke, so the rep signed her up for the tobacco rate Plan G.

Unwittingly, Linda had made at least three mistakes that I covered in the Ten Medicare Supplement Shopping Mistakes. She wasn’t taking advantage of open enrollment discounts for tobacco users, she called an 800 number, and she was going to pay a 25% higher premium than need be. And here is the saddest part.

There are millions of Americans on fixed incomes and tight budgets. Many of them are making a financial sacrifice to purchase their Medicare supplement. Some have considered the usually lower premium Medicare advantage plans, but they are concerned about the various copays. This was the case in Linda’s situation. She wanted the peace of mind and financial protection that the Medicare supplement plan affords. So ask yourself, are the people on the other end of the 800 number really concerned about you and your budget, or are they just interested in selling you their company plan?

As I sit down face to face with prospective clients, I well understand the pain and frustration that many of them are going through. There are times when I wish I could discount the premium, but regulations prohibit that. The least I can do for them is to show them how to navigate through the Medicare maze as affordably as possible. Folks, that doesn’t happen when you call the 800 numbers.

There are other ways that a good agent can show people how to save money. For example, on several occasions I have shown people how to save four months of premium for their Part D prescription plans. For those taking no meds, they can wait until the seventh month of their Initial Enrollment Period (IEP) to sign up for their plan. That saves them four month’s premium or generally $60 to $120. The 800 number people are instructed to get you signed up as soon as possible.

Here is another story of a bad experience caused by responding to a company mailer and calling their 800 number. I signed up Shirley for a Medicare supplement, and a few months later she mentioned to me the burial life insurance policies that she bought for both her and her husband. She described to me the very affordable premium and what she thought was a permanent policy. As soon as she mentioned the actual premium, I knew exactly what she had purchased. It sure wasn’t what she thought it was!

I explained to her, “Oh, I know what you have. It’s actually a form of term insurance with a premium that stair steps up every five years. If you live a long time, you will likely be unable to continue paying their escalating premium. People get those policies only to drop them when they can no longer afford the ballooning rates. In other words, it puts you in the position of hoping you will die before dropping the policy so your beneficiary can collect the death benefit.

I continued by telling her, “I want you to verify everything I’ve said. Call the insurance company tomorrow and ask them how it works.” Shirley did exactly as I suggested, and was not happy when the rep confirmed everything I outlined to her. She was disgusted by the misrepresentation and immediately cancelled both policies.

Here is what happened in another situation. Becky received an elaborate brochure with an impressively embossed plastic wallet card attached. Her name was on it, of course, and the card read in shiny gold letters, “PREFERRED MEDICARE REVIEW. She called their 800 number and left a message. Within 30 seconds a call came back to her. In the end she signed up over the phone for a high-deductible Plan F. She paid 22% more than she needed to.

This company is essentially a boiler room operation that uses “flim-flam” marketing. Their rep also led Becky to believe that their plan would have the same rate for four years. When I explained to Becky that no company has a four year rate lock, she said, “I’m going to call my agent.” Moral to this story: The more flim-flammy the marketing, the more flim-flammy are their reps.

There are many, many more examples that I could cite. Calling a company’s 800 number can lead to costly mistakes. Even if an 800 number company is competitive, a good independent agent will most likely carry that company’s products anyway, so you don’t have to go the 800 number route.

A related mistake that people make when calling a company’s 800 number, is thinking that somehow it will be a better deal (price) compared to working with an agent. Usually, the opposite is true. The Medicare supplement rates are all filed with your respective state insurance department. These rates are the same whether you buy your Medicare supplement direct from the company, an independent agent, or even Santa Claus. Even after hearing this, some people continue to ignore the facts and press onward in their blind ignorance and stupidity.

When you buy via the 800 line, you are paying a commission to an agent that in the majority cases, you will never meet or speak with again. If you have a question, a problem, or a claims issue, most generally you will speak with a different rep every time you call that company.

There are a myriad of other ways that a caring agent brings plenty of value to the table for the people he meets. For sure, one of the ways is advising them to avoid garbage financial products and insurance scams.


This leads to the third major mistake.