Insurance is a critical part of any sound financial plan. Insurance provides leverage against a variety of risks that can impact the average person ranging from Auto Insurance, Homeowners Insurance, Health Insurance, Disability Insurance, Life Insurance, Long Term Care Insurance.
As common as Insurance is, and with as much money as the average person spends on Insurance, most people do not understand this complex financial instrument. According to the Bureau of Labor Statistics Consumer Expenditure Survey (2014), Insurance is a consumer’s 5th highest monthly expenditure behind housing, transport, food and pensions. Though for many Americans if you add up all types of insurance: Auto, Health, Homeowners/Renters, Disability and Life – monthly total premiums can surpass housing.
And the Insurance Industry has its fair share of participants (companies, agents, wholesalers) who thrive on that complexity to make sales that do not fit what the actual insurance needs. There has been a tendency especially with annuities, life insurance and long term care insurance to introduce insurance products with more options. And each time an option is added, it becomes more challenging to understand that product.
Oftentimes, this is not a matter of intent, it is simply that even those within the industry or those who participate in the insurance procurement and review process (third party advisors such as financial planners, CPA’s, etc.) often do not understand insurance. The majority of people and companies do a good job however there is a significant gap in Insurance Literacy in this Country.
The Insurance Bill of Rights was created to provide simple, easy to understand guidelines for everyone involved in the Insurance ecosystem including consumers, insurance agents, wholesaler, insurance companies, financial advisors, etc.
The Insurance Bill of Rights is based on the simple premise that Insurance Agents, Wholesalers and Companies should place the consumer’s best interests first, to the best of their abilities. The Insurance Bill of Rights provides simple, clear and reasonable guidelines to accomplish this goal. It is a standard of excellence for all in the insurance industry.
The importance of this movement is that for many years, insurance has been a black box, something that people know that they need though they no real, unbiased information about it. And most people do not have the right coverage to fit their needs.
In my thirty year career starting as an agent transitioning to a fee based insurance consultant, litigation consultant , author and consumer advocate; the situation behind the scenes is oftentimes not pretty. However, the majority of these situations could be avoided if all members of the insurance industry followed The Insurance Bill of Rights.
Insurance Consumers should have the right to receive any information that they request in a timely fashion. They should also be provided with all relevant information needed to make a decision in an easy to understand fashion. The goal is to not flood the Insurance Consumer with something like a mutual fund prospectus, rather it is to provide them with useful information.
It is always a win-win situation when all parties come out ahead and are on the same side of the table. Truth always has a way of coming out and to get ahead in this digital world where there are fewer secrets and more information and choices, those who strive to provide the highest quality service and information will come out ahead.
For many years, consumers have ended up with insurance that they don’t need with premiums that either they can’t afford or really see no value in paying. It’s time to change the conversation so that consumers end up with coverage that fits their needs with premiums that they can afford into the future.
The Insurance Bill of Rights is an insurance playbook for Consumers, Insurance Agents and Insurance Companies to follow that puts every on the same page.
Monitoring an insurance policy and making adjustments to an insurance portfolio is something that is almost always overlooked. Over the years, insurance needs change. Sometime the change in need is simple such as getting a new car while other times, it can be more complex and overlooked like having a new child who’s not added as a beneficiary to an existing life insurance.
This is where theThe Insurance Bill of Rights matters is that making these adjustments, just like having regular maintenance done on your car is what will ensure that a consumer has the right coverage in place at the time of making a claim. If the right coverage is not in place at claim time, then what is the point of having insurance?
While it is not a panacea and there still would be bad actors and inappropriate sales, it is a call to action and gives guidance to consumers on what to look for, what to expect and what they have the right to. It is impossible to know if something is missing if you don’t know what that item is.
Knowledge is power and the power should be in the hands of the customer, the Insurance Consumer. Having and knowing your rights will protect and benefit Insurance Consumers along with guiding the Insurance Community to being called to task when needed and to helping Consumers and Agents optimize insurance coverage and minimize premiums.
Please let me know if you have any questions or suggestions. Thanks again for your support.