Thank you to Jack Venturi for this informative post on how Ethics (and The Insurance Bill of Rights) can be implemented in the life insurance quoting process. Please note that the following are the views of the author and not necessarily those of The Insurance Literacy Institute. This post is provided to give consumers information to become educated and is not an endorsement. No compensation was received for this guest post.
When an insurance agent first communicates with a consumer planning on applying for life insurance, usually the first question that they ask is “what will it cost.” Many life insurance shoppers don’t look at any other aspect other than the premium. This is usually because they have very minimal experience and knowledge of life insurance products and how they work. At this point in time the consumer will be placing their trust in the agent’s hands. The consumer will be hoping that their new insurance agent will treat them honestly and look out for their best interest. Purchasing life insurance is a very important event for thousands of consumers each year. Due to the fact, that the average consumer has very little product knowledge, the agents experience and training will be extremely important to this potential new client. The actual final outcome of their quest for life insurance will also be very dependent on their agent’s adopted code of ethics. This potential life insurance applicant will be experiencing a feeling of uncertainty communicating with their new agent who at this point in time is nothing more than a perfect stranger. Now is the time for the insurance agent to demonstrate that he or she is a true professional and will be helping this perspective client to the best of their ability. It is crucial for
Insurance agents should adhere to a strict code of ethics and proper conduct such as outlined in The Insurance Bill of Rights.
More and more insurance companies are bypassing advisors and selling direct to the consumers to save money from paying commissions. Just a handful of unethical agents that create an unfavorable experience that can promote more and more people to buy direct from the carriers and no longer work with agents and brokers. The value of having an experienced agent or broker can be priceless but only if the agent uses proper conduct helping their new client. Unfortunately, many people have had a bad experience with sales people in general and in many cases this was due to an unfavorable experience purchasing a new or used car for one of the most common examples.
Regardless of what kind of sales experience it was, you can bet that they will now be extra cautious of anyone attempting to sell them most any kind of product or service. Today’s insurance agents have their work cut out for them just trying to establish trust with their new potential clients. Trust and confidence has to be earned before anyone will move forward after the initial quoting process.
Some consumers never feel a sense of confidence and trust and sometimes never purchase the life insurance they desperately need.
I have spoken with many consumers that have been shopping for life insurance on and off for years and never felt comfortable enough to move on to the application process. Every time they go back into the shopping process they find the rates have gone up and now it will become more difficult for them to find the life insurance they need for an affordable premium especially if their health history has changed. I have found that people in this situation have never had an agent sit down and explain how life insurance works and the differences in the various types of plan designs. They have inadvertently been kept in the dark and are confused by all the different companies available and various plan designs. Usually a 10-minute seminar by their agent could have taken out all the mysteries of life insurance. Proper ethics also comes into play in this type of scenario. A good insurance agent should help the individual understand what they are buying and not just take their word for it.
Here is a basic outline of what I personally do to help people purchase the best life insurance for their specific needs. What is the purpose of the life insurance? This is the first question I am going to ask. Knowing if the insurance is going to be used to cover a mortgage, college tuition, car payments, the purchase of business related real estate or just general reasons for insuring their income in case of their unexpected passing. This will help me understand what type of policy or policies would be suggested to properly insure this individual. Helping your applicant purchase the correct policy for their specific needs is probably the most important factor in being a good insurance advisor because this is where it all begins.
What would be a comfortable premium? This is usually in my second category of questions to be asked. Your applicant’s financial situation is very important and should be given a lot of consideration so you can suggest an affordable premium that will not become a financial burden. Life insurance premiums can be easily compared to car loan payments except for the fact that the monthly premiums will keep coming in for possibly the lifetime of the proposed insured.
An individual’s budget will also dictate what the face amount will likely be. An applicant’s budget should always be taken into consideration right from the very beginning of the quoting process. Find out first what your potential client can actually afford before getting carried away with a comprehensive quoting session.
Choosing the most appropriate life insurance company is one of the most important factors so your client has the opportunity to receive the lowest possible rates. Needless to say, this decision should never be based on financial compensation by the insurance company. It is your duty as a good agent to find the lowest rates along with other important factors such as financial strength and good claims paying ability backed up by a positive reputation in the life insurance industry. The average consumer knows very little about life insurance and it is your job to help them make the right decisions.
Keep in mind that the life insurance you sell to your client today will mean the difference of his dependents living easy or living hard upon his unexpected demise. Following a firm code of ethics such as The Insurance Bill of Rights, is a very simple process and it will be something you should practice every day. Being an honest and ethical agent will increase your referrals and will give our profession the respect it definitely deserves.
Your client is depending on you to guide him or her through the whole process of purchasing their life insurance. If your client is choosing you to be their agent, you should do your job to the best of your ability. The end result of utilizing good ethics begins with honest professional advice and ends with a properly insured new client with a premium they can easily afford.
About Jack Venturi:
Jack Venturi has been a licensed insurance broker for more than 25 years specializing in all forms of life insurance products in all 50 states. Learn more about him at bestchoicelifeinsurance.com. View Jack’s listing and pledge for The Insurance Bill of Rights (click here).