I believe the nature of the insurance industry is a noble one. The concept of insurance is to protect ones assets. It is the transfer of risk from the individual to the insurance company. Over the years I have had many worried clients thankful for their insurance policy after settling a claim they thought they would never have. But there is a growing skepticism which is negatively impacting the reputation of insurance professionals. The problem is a general lack of trust has formed between the consumer and the insurance agent. This lack of trust seems to stem from the perception that insurance agents often try to sell people something they do not want.
I fundamentally believe insurance agents have a moral obligation to their clients to make sure the policy being offered is adequate for the needs of the client. It is true, insurance agents are paid a commission to sell insurance policies. But there is a more prominent aspect to being an insurance agent than just selling a policy.
Unscrupulous insurance agents have rightfully earned the reputation as being smarmy “sales people”. This reputation has been successfully gained through misinformation, high pressure tactics, a lack of knowledge and flat out dishonesty when communicating to the client. This however, does not mean all insurance agents conduct questionable practices. Where do we draw the line to distinguish an “insurance sales person” from an “insurance consultant”? There is a difference. It is a simple matter of how two basic concepts are prioritized; making a sale and considering the client’s best interest. A salesman will focus on the sale first and the needs of their client second. An insurance consultant will focus on the needs of their client first where the sale will follow after good advice is offered and trust has been established.
Why should you care? It really is very simple. Those insurance agents who focus on the sale will reduce or omit coverage to lower the cost of a policy. Some will ignore the insurance companies underwriting guidelines in order to “close the deal” which will inevitably cause problems for the policy holder. Others will tell you what you want to hear to falsely gain your trust. Is this the type of insurance agent you want protecting your family?
Many insurance “sales people” get away with their questionable methods because they believe the odds you will have a claim are statistically low and therefore will unlikely have to explain their actions to you. But are you willing to be a statistic? A majority of people I speak with believe they will never have a claim. Unfortunately this is untrue; otherwise there would be no need for insurance.
Insurance consultants believe the client should understand why certain coverage is being recommended. Consultants will spend time with their client to educate and inform them of their options and why those options may be important. The ultimate goal of an insurance consultant is to assist the client in the decision making process to find a policy with the coverage that will best suit them. Working with a reputable insurance agent does not mean you will have to necessarily pay more for insurance, it just means their priority will be you and not the sale.
More and more it all comes down to cost for the typical insurance consumer. In an unstable economy, people become more frugal with their money. The “insurance salesman” knows this. We see advertisement after advertisement telling us about an insurance company who can save you money by calling them. These insurance companies proclaim to offer discounted rates and even suggest you obtain your own quote by going to their web site to find the price that is right for you. Do you know enough about insurance to decide what types and how much coverage you should have? Is it the right approach to purchase insurance simply based on cost? This is what people are being trained to believe. Sell, Sell, Sell! Cheaper, Cheaper, Cheaper! All the while integrity is being lost. With the right insurance agent, it is possible to have both a comprehensive insurance policy and an affordable premium.
The insurance consumer has a choice. They can be “sold” an insurance policy from a salesman or they can purchase an insurance policy from an insurance professional who will be your consultant. There is a difference and it is not always about the price.