CPA Journal, The: Life insurance: Dispelling illusions
"There are numerous issues to be reviewed and resolved while shopping for life insurance before making an intelligent purchase. Who is best equipped to review the alternatives? Who can explain the differences between illustrations from the same company for the same policy form, same premium amount, and same amount of coverage? What about tax issues?
The most informed responses to the questions above will not be obtained from the typical mail-in response or 800 number, nor will they come from the Internet, the relative, the banker, the stockbroker, the fee-only planner, or even the CPA. The most knowledgeable responses will come from well-qualified life insurance professionals with years of hands-on experience and professional credentials: the chartered life underwriter (CLU) or chartered financial consultant (ChFC). Many such advisors will also possess other advanced credentials, such as an MBA, JD, or CPA. Many have also created strategic partnerships with CPAs, bankers, and property and casualty firms.
These insurance professionals will be members of the National Association of Insurance and Financial Advisors as well as the Society of Financial Service Professionals, just as lawyers will belong to their state and local bar associations and accountants to the AICPA and state societies. The more sophisticated insurance advisors will be members of the local Estate Planning Council and will provide satisfied client references. Going with a newer agent is a less risky choice if working jointly with a more seasoned professional.
A final word on agents, brokers, and advisors. The truly professional insurance advisor may have a primary company or relationship, but should not represent just one carrier. Today's advisor must have relationships with multiple companies and access to a wide variety of products. A single purchase may comprise a variety of products from several companies. The carriers should have solid financial ratings and a long-term commitment to the life insurance industry and its products.
A professional insurance advisor does not just sell a policy. Bringing their personal experience to bear, they advise and counsel, they review policy forms, options, costs, benefits, structures, tax implications, and nonfinancial considerations as they relate to the prospective purchaser, both at the time of purchase and in the future."
"There are numerous issues to be reviewed and resolved while shopping for life insurance before making an intelligent purchase. Who is best equipped to review the alternatives? Who can explain the differences between illustrations from the same company for the same policy form, same premium amount, and same amount of coverage? What about tax issues?
The most informed responses to the questions above will not be obtained from the typical mail-in response or 800 number, nor will they come from the Internet, the relative, the banker, the stockbroker, the fee-only planner, or even the CPA. The most knowledgeable responses will come from well-qualified life insurance professionals with years of hands-on experience and professional credentials: the chartered life underwriter (CLU) or chartered financial consultant (ChFC). Many such advisors will also possess other advanced credentials, such as an MBA, JD, or CPA. Many have also created strategic partnerships with CPAs, bankers, and property and casualty firms.
These insurance professionals will be members of the National Association of Insurance and Financial Advisors as well as the Society of Financial Service Professionals, just as lawyers will belong to their state and local bar associations and accountants to the AICPA and state societies. The more sophisticated insurance advisors will be members of the local Estate Planning Council and will provide satisfied client references. Going with a newer agent is a less risky choice if working jointly with a more seasoned professional.
A final word on agents, brokers, and advisors. The truly professional insurance advisor may have a primary company or relationship, but should not represent just one carrier. Today's advisor must have relationships with multiple companies and access to a wide variety of products. A single purchase may comprise a variety of products from several companies. The carriers should have solid financial ratings and a long-term commitment to the life insurance industry and its products.
A professional insurance advisor does not just sell a policy. Bringing their personal experience to bear, they advise and counsel, they review policy forms, options, costs, benefits, structures, tax implications, and nonfinancial considerations as they relate to the prospective purchaser, both at the time of purchase and in the future."
