AcademyWho Gets Offered Which Product: why the offer is not the marketEverything by subject
How Money Gets Sold

Who Gets Offered Which Product:
why the offer is not the market

In this chapter
  1. A different question from "is this a good product"
  2. The mechanism: competition that runs backwards
  3. The closing table
  4. The workplace, the base, the school
  5. Age, grief, and the seminar
  6. Young earners: sold the wrong thing, missing the cheap thing
  7. What actually protects you
  8. Two things this chapter refuses to say
  9. The three questions
  10. Where Plenee fits
  11. The short version

A different question from "is this a good product"

Every other chapter about insurance asks whether a product is worth buying. This one asks a question that turns out to matter more: who gets offered it in the first place, and why them.

Insurance is not bought so much as distributed. Products reach people through channels — a loan closing, a workplace, a military base, a union, a seminar with lunch — and the channel selects the audience long before anyone weighs the merits. Understanding which channel you are standing in tells you more about what you are about to be offered than any brochure.

Two things need saying before the rest of it. Some of this targeting is entirely appropriate: a product aimed at a group can simply be the right product for that group, and this chapter says so where it is true. And a seller's incentive is a reason to check the price, not a reason to conclude the product is worthless.

The mechanism: competition that runs backwards

Most markets work by sellers competing for buyers. Some insurance markets do not, and the regulators have a name for it.

Where insurance is sold through an intermediary who chooses which product sits on the desk — a lender, a dealer, a servicer — the insurer is not competing for you. It is competing for shelf space, and it wins that by paying the intermediary more. Since the money comes out of the premium, competition pushes the price up rather than down.

This is called reverse competition and it is defined in state insurance codes.1 It is the single most useful idea in this chapter, because it explains why the products sold to captive buyers are consistently the poorest value without anyone having to behave badly.

You can see it in the loss ratios. Credit life insurance — which pays off a loan balance if the borrower dies — returned an average of 47.62% of premium as claims over 2012–2021. Credit accident and health, which covers the payments if you cannot work, returned 33.30% over the same decade, declining almost every year to 26.25% by 2021.2

Set that against what the rules intend. Ohio's rate regulation sets prima facie rates calibrated to produce a 50% loss ratio on credit life and 60% on credit accident and health.3 The national experience on the second product runs at roughly half its benchmark.

The closing table

The most reliably captive moment in consumer finance. You need this loan, from this lender, today, and the products appear after the credit decision, priced into a monthly payment where you cannot see them.

Credit life and credit disability are the classics. The honest steelman matters here: someone with a co-signer, a spouse on the title, or heirs who would inherit a repossession has a real reason to want a balance cleared at death. Term life would be cheaper per dollar of cover — but a borrower who cannot pass underwriting is not choosing between credit life and term life. They are choosing between credit life and nothing. What is extractive is the pricing and the sale, not the coverage.

Credit disability is the weaker case. The need is genuine — a household with no cushion faces serious consequences from two months out of work — but a product returning a quarter of premium is not meeting it well. And the low claims rate is partly a fact about the claim process: filing requires documentation and persistence from people working hourly jobs with no HR department to help.

Lender-placed insurance is the other one, where a servicer buys cover on a property when the owner's policy lapses and bills them for it. The documented record includes loss ratios around 25.3% against roughly 63% for voluntary homeowners cover.4 The industry steelman is recorded fairly in the same investigations and is real: an insurer covering a whole servicing portfolio cannot underwrite or decline individual properties, which is a genuinely different risk from one it can inspect and price.

One important caution about enforcement. In 2022 the Federal Trade Commission and an attorney general brought a $10 million action against a multi-state dealer group over unwanted add-ons, which included a finding that Black customers were charged more than comparable white customers for the same products. That case is real. But on 7 August 2026 the FTC announced it will no longer bring disparate-impact cases of that kind.5 So the case is history, not a description of current enforcement — and anyone relying on regulators to catch this should know the posture changed this month.

The workplace, the base, the school

Where an institution grants access, the institution's trust does the selling.

The military has the most documented history in this subject, and it is history — the evidence runs from the late 1990s to 2009 and there is no comparable modern finding. Congressional and audit records describe products with roughly a 50% first-year sales load and completion rates between 10% and 43%, and a 1999 inspection that found solicitation violations at all eleven bases visited.6 Congress responded in September 2006 with legislation banning the product, imposing disclosure duties around the cheap government cover servicemembers already have, and creating a registry of barred sellers.7 A 2006 multistate settlement barred three insurers from soliciting on any US military installation worldwide for five years.8

What is honest to say now: a follow-up audit in 2009 found the barred-seller lists were "not easily searchable" and that sales of presumptively unsuitable products "appear to be continuing".8 After that the record goes quiet. That is a risk statement, not a finding.

Teachers are the clearest current case. In 2020 the SEC brought an action over sales to Florida teachers involving payments to a teachers' association whose endorsement helped secure access to the schools.9 The structural point is not one company: the retirement plans available to public school employees are dominated by insurance-wrapped products rather than low-cost funds, largely because the distribution channel into schools is built that way.

Unions and affinity groups are an explicit business model rather than a hidden one. One major insurer's own annual filing describes a subsidiary that "markets to members of labor unions and other affinity groups", accounting for 53% of its life premium.10 That is disclosed, legal, and not by itself wrong. It is worth knowing that the trust doing the work belongs to the organization, not to the product.

Age, grief, and the seminar

Older buyers are targeted for an obvious reason: they hold the assets. Much of the specific evidence is old, and saying so is part of using it honestly.

A coordinated national sweep examined 110 firms and branch offices running investment seminars, between April 2006 and June 2007. It found 23% involved possibly unsuitable recommendations, 13% showed indications of possible fraud, and only 4% were clean; 57% used exaggerated or misleading advertising. Seminars were routinely marketed as educational, with assurances that nothing would be sold, and attendees often did not know the speaker's sponsorship.11

That conduct predates a great deal of the current rulebook — the best-interest revision to annuity sales rules, the broker conduct standard, senior-protection provisions on account holds and trusted contacts. Read it as the reason those rules exist rather than as a picture of today.

The situation to be genuinely careful in is narrower and has not changed: a lump sum arriving alongside grief. A death benefit, a settlement, a retirement payout. There is one defense and it costs nothing — no irreversible financial decision for some months after a bereavement. Money in a savings account is not going anywhere; a surrender schedule is.

And the steelman deserves its weight, because the targeting here is partly aimed at a real need. An immediate annuity solves longevity risk, which nothing else does. Independent analysis puts its value at about 80 cents per dollar for immediate annuities against 50 cents for deferred, stable since 2000, and concludes that buyers gain once the insurance value is counted rather than just the expected payments.12 The problem is not that older people are sold annuities. It is which annuity.

Young earners: sold the wrong thing, missing the cheap thing

This group experiences both failures at once.

What gets sold is permanent life insurance to people with no dependants, pitched as an investment — and, in some cases, policies on children, insuring a life with no economic dependants at all.

What goes unbought is cheaper and matters more. Renters insurance averaged $170 a year in 2021, against $1,411 for homeowners cover,13 and its liability half is the part nobody buys it for. Disability cover is skipped almost universally by the people with the longest earning career left to protect.

And the free thing goes undone: US will ownership was 24% in 2025, down from 33% in 2022, with 43% of those without one saying they simply had not got round to it. The largest single group without a will is Americans with children under 18.14

What actually protects you

Worth being precise, because assumptions here are usually wrong.

Annuity sales are covered by a best-interest standard in most states. You are entitled to ask for the seller's cash compensation, and both cash and non-cash compensation are covered by the rules.15 Nobody volunteers it.

Life insurance sales generally are not covered by that standard — with an important exception: New York extends a best-interest requirement to life insurance as well.16

Language is a real vulnerability and a documented one. Roughly 25 million US residents have limited English proficiency, and a regulator has found instances of narrower product menus offered in Spanish than in English.17 Being sold to in your own language by someone from your own community is often genuine service. It is also a channel, and both things are true at once.

Two things this chapter refuses to say

That credit-based insurance pricing is settled. It is contested. A large federal study found credit-based insurance scores do predict claims, that their effect on predicted risk differs across racial and ethnic groups, and that the scores act partly — but only partly — as a proxy.18 Reasonable people read that differently. Presenting either conclusion as settled would be dishonest.

That today's catastrophe-driven non-renewals are redlining. The historical maps are real. The current withdrawals track fire and storm exposure. Assuming the first explains the second is exactly the reasoning this chapter is meant to guard against, and the 2025 data has not done that work.

The three questions

  1. Why am I the one being offered this? If the answer is "because of where I am standing" rather than "because of what I need", that is worth a pause.
  2. Who chose that this product would be here? At a closing table, in a staffroom, at a base — someone decided which company's product sits on the desk, and was usually paid to.
  3. Could I buy this somewhere I chose? Almost always yes, almost always cheaper. GAP, life cover and disability cover all exist outside the room you are being sold them in.

Where Plenee fits

The products in this chapter share a property: they are invisible. Financed into a loan, deducted from a pay stub, bundled into a payment. Plenee's contribution is to name them — to show what is actually being paid, to whom, every month, beside everything else competing for the same money. Several of them can be canceled for a refund nobody will mention.

The short version

What you get offered depends on where you are standing. Where a lender, dealer or employer picks the product, competition runs backwards. Insurers compete for the seller's favor by paying more, and that money comes out of your premium — which is why credit insurance pays back a quarter to a half. The military and teacher cases are documented, and the military one is history rather than a current finding. Older buyers are targeted for their assets, and the answer is not to avoid annuities but to know which kind. Young earners get sold the expensive thing and skip the $170 one. And you can nearly always buy the same cover somewhere you chose.

Also in these situations
  1. One Income, No BufferWhere you are decides what you are offered. The pattern, with the numbers.
  2. Parents and Children at OnceWhat gets sold to an older person living alone, and by whom.
  3. Policies You Already OwnWhat gets sold to someone retired and living alone, and how it arrives.
  4. Two Countries, One BudgetWhy the same product costs you more, and what determines the offer.
Sources
  1. "Reverse competition" is defined in state insurance codes and NAIC materials as competition that raises rather than lowers price, arising where the party choosing the insurer is not the party paying for it.
  2. NAIC, Credit Life Insurance and Credit Accident & Health Insurance Experience 2017–2021 (2022): credit life ten-year (2012–2021) average loss ratio 47.62%, 42.70% in 2019 and 64.00% in 2021 — the 2021 rise reflects pandemic mortality and illustrates why a single year's figure misleads. Credit accident and health: 41.24% (2012), 30.62% (2019), 26.25% (2021), ten-year average 33.30%. Earned premium in 2021: $566.6m credit life, $676.8m credit A&H.
  3. Ohio Administrative Code 3901-1-14, setting prima facie rates calibrated to a 50% loss ratio for credit life and 60% for credit accident and health. Wisconsin Ins. 3.25 sets an initial basic loss ratio of 50%. These are prospective rate-approval standards, not rebate requirements.
  4. GAO-15-631 on force-placed insurance, and the New York Department of Financial Services consent order of 21 March 2013, for the loss-ratio comparison of roughly 25.3% against about 63% for voluntary homeowners cover, and for the industry position that portfolio-wide cover cannot be individually underwritten or declined.
  5. Federal Trade Commission and Illinois Attorney General action against Napleton Automotive Group, April 2022: $10 million judgment, $9.95 million in consumer redress across eight dealerships, including findings that Black customers were charged about $190 more in interest and $99 more for comparable add-ons than similarly situated non-Latino white customers; redress distributed November 2022 and November 2023. On 7 August 2026 the FTC announced it will no longer bring disparate-impact cases. The case stands as a record of past conduct; it should not be cited as evidence of current enforcement posture.
  6. Senate Report 109-282 and related congressional record: a roughly 50% first-year sales load on the products at issue, completion rates between 10% and 43% for 1980–1987 cohorts, and a 1999 Department of Defense Inspector General finding of solicitation violations at all eleven bases visited. This evidence is from 1999–2006.
  7. Military Personnel Financial Services Protection Act, Public Law 109-290, enacted 29 September 2006: product ban effective 30 days after enactment, disclosure duties regarding government-provided servicemember life cover, and a registry of barred persons.
  8. GAO-06-23, Financial Product Sales: Actions Needed to Better Protect Military Members (2005), and GAO-09-452 (29 May 2009), which found barred-seller lists "not easily searchable" and stated that sales of presumptively unsuitable products "appear to be continuing". The June 2006 multistate settlement barred three life insurers from soliciting on any US military installation worldwide for five years, with 48 jurisdictions signed on as of April 2009. No comparable finding after 2009 was located; the current position is unknown rather than established.
  9. SEC Press Release 2020-164, 28 July 2020, concerning sales of retirement products to Florida teachers and payments connected to a teachers' association endorsement.
  10. Globe Life Inc., Form 10-K for FY2025, filed 25 February 2026: a subsidiary that "markets to members of labor unions and other affinity groups", representing 53% of life premium. Disclosed in the company's own filing.
  11. Joint regulatory examination of investment seminars, 110 examinations from April 2006 to June 2007: 23% involved possibly unsuitable recommendations, 13% showed indications of possible fraud, 4% found no problems, 57% used exaggerated or misleading advertising claims, and seminars were commonly presented as educational with assurances that nothing would be sold. This conduct predates the 2018–2020 changes to broker conduct standards, annuity suitability rules and senior-protection provisions.
  12. Center for Retirement Research Issue Brief 21-5, "What Is the Value of Annuities?", 2 March 2021: approximately 80 cents per premium dollar for immediate annuities and 50 cents for deferred, broadly stable since 2000, with the conclusion that buyers gain once the insurance value of longevity protection is counted rather than expected payments alone.
  13. NAIC data via the Insurance Information Institute: average renters premium $170 and average homeowners premium $1,411, both 2021 figures.
  14. Caring.com / YouGov 2025 Wills and Estate Planning Study, 2,500+ US adults: will ownership 24% in 2025, down from 33% in 2022; 43% of those without a will said they had not got around to it; Americans with children under 18 form the largest cohort without wills or estate planning documents.
  15. NAIC Suitability in Annuity Transactions Model Regulation #275, §6.A(1)(c) and §6.A(1)(d), the Appendix A compensation-on-request mechanism, and §5.I(2) and §5.J covering both cash and non-cash compensation. Adoption varies by state.
  16. New York Regulation 187 (11 NYCRR 224) extends a best-interest standard to life insurance sales as well as annuities, making New York an exception to the general US pattern.
  17. Consumer Financial Protection Bureau data on limited English proficiency — approximately 25 million US residents — and Supervisory Highlights, Fall 2016, p.23, regarding narrower product menus offered in Spanish than in English in one examined context.
  18. Federal Trade Commission, 2007 report on credit-based insurance scores: the scores predict claims risk; their distribution and predicted-risk effects differ across racial and ethnic groups; and they act as a partial proxy. This remains a contested policy question and is presented here as contested.

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