90% of life insurance agents cash those commission checks and forget anything they said about service. If this past year has taught us anything, we should have learned that a financial adviser that doesn’t stay on top of changes and doesn’t stay in touch can cost us tons of money, quickly.
Transamerica just posted a piece today talking about the new, even more important role that life insurance plays during these “uncomfortable” times. But along with the comforting features of life insurance such as tax free benefits, comes the bad news, a real ongoing black eye for the life insurance industry, the fact only 10% of agents do annual reviews with their clients.
Annual reviews are a two edged sword among the 10% of agents that actually participate in the practice. I know agents that will follow up with clients annually at least a few times with the express purpose of up selling or proposing stupid ideas such as life settlements. If they find the client isn’t going to be an ongoing cash cow, they never call again.
Annual reviews are a service that clients should expect. They have put their trust and faith in an agent that is handling what is being called the “new asset class”, their families future as held together by life insurance. Clients should come to trust that an annual letter and call from their agent won’t have hidden agenda, but will keep them current on their coverage and educate them on changes that have occurred that might have an impact on their overall financial plan. Clients should expect an agent to let them know when there are opportunities to save money either with new products or when laws change and the client’s need for life insurance becomes less.
Just a few questions concerning your current agent.
1. If you have an estate tax plan that uses life insurance has your agent let you know that over the last 6-7 years there have been huge opportunities to save amazing amounts of money on the permanent universal life or whole life policy that is funding that plan?
2. Has your agent let you know that right now there is the end of an era of prices that will likely never be seen again? Term insurance prices are no longer going down and there is still time to lock in rates that will soon be known as the lowest that ever were. But not much time. A call from your agent a year from now will be too late.
3. Has your agent that sold you that whole life or universal life policy ever told you about universal life policies with an external no lapse guarantee, a product that can replace traditional policies for pennies on the dollar with better guarantees? Has your agent told you that opportunity is taking the same turn as term insurance and will cost more or be unavailable with many companies very soon?
4. Has your agent that worked so diligently to sell you life insurance for your estate plan 5 or 10 years ago called to let you know that the estate tax exemption has gone from $600,000 to $3,500,000 since 2001?
5. Did your life insurance agent call to let you know that your term insurance policy was coming to the end of its’ guarantee period or did you just get a much larger bill from the insurance company?
6. Do you know if your life insurance agent is even still in business?
Bottom line. It’s called service folks and we, as life insurance agents, should be expected to provide it even if we never make another dime. We have asked you to allow us to manage part of your family asset portfolio and we should provide the service due from a financial professional.