Integrity, Knowledge And Ethics are the Pillars to the Life Insurance Industry
BeamaLife commentary on the state of the industry.
PISCATAWAY, NJ—07/23/09—As with every business, an ethical and knowledgeable staff is its most valuable asset.
Says Neil Jesani, CEO of www.BeamaLifeInsurance.com, in almost any life insurance company you will seldom find a Harvard, Yale, Stanford or other top-tier educated employee doing the sales. This is because the compensation of a life insurance salesman is based upon commission, knocking on doors and making cold calls. According to LIMRA, approximately 11% of agents succeed or remain in the industry beyond five years”
An educated and informed clientele is essential to any life insurance company, unfortunately though, the hundreds of companies who deal with life insurance draw in their customers by not very knowledgeable and “commission only” life insurance agents. This inevitably, can blur the lines between what is in the best interest of the life insurance company and what is in the best interest of the client. It is therefore vital to the industry that more stringent guidelines are established across all related companies.
There have been numerous cases where an insurance agent tries to help its client while simultaneously damaging the life insurance company and putting themselves and their clients at risk. A common example is an agent who may assist a client to establish that he is a non-smoker to obtain a lower premium, despite the fact that he is a smoker. This type of self-serving process hurts the industry and is blatantly illegal. Similarly, and illegal as well, is giving “kick backs” to clients from the life insurance commission proceeds.
“Life insurance buyers seek both knowledgeable and ethical agents to work with for the same reason that a sick patient will seek out the best doctors with highest degree of professional ethics” Mr. Jesani continued. “It is an absolute necessity that the industry provides agents who are both knowledgeable and possess the highest integrity.
Even GEICO struggles with the knowledge aspect. For example, GEICO mentioned in its spring 2009″ GEICO Direct” magazine that “Term life can also help you achieve estate planning goals”. Does term life really fit into an estate planning portfolio?
The life insurance industry may continue to be plagued by this chronic problem. Life Insurance companies have to come up better hiring decisions, revised compensation and distribution methods to survive and thrive in a tough global economic environment.
