David H. Kinder, RFC®, ChFC, CLU
The Value of an Agent, Advisor, or Consultant
Updated: Jan 18
One of the tests of a valuable agent is that they are available for service and advice AFTER the sale. Unfortunately, insurance company customer service is NOT a source of advice. They can tell you what you CAN do and they will do what you REQUEST of them… but not necessarily give you ideas on the best ways to go.
Case in point: Back in 2000, my father experienced a downturn in his business. He runs a county-owned (or state owned - depending on California politics) cafeteria and it’s one of the busiest in the State of California. At this time, the county (or the state) decided it was time to do an extensive remodeling of that large dining room area (you could easily fit about 500 people in it) and turn it into a juror’s waiting area instead. The construction took many months and, due to the noise and dust, most regular customers chose not to eat there for quite some time.
This downturn caused my father to sell the custom home he had and move into a rental property. He did what most of us would do – which is to “tighten our belts”.
However, he also CANCELED 3 of his whole life policies that he had bought many years prior. Why did he CANCEL these policies? Because he didn’t want to pay on them anymore AND he needed to access the cash values.
Did he call his agent for ideas and advice? No.
Did he call any other agent or advisor for ideas and advice? No.
He just DID it.
And he regrets it to this day.
Why? Well, once *I* got fully trained and skilled in how life insurance worked, and I explained how life insurance policy loans worked… he wished he would’ve done that instead of cancelling the policies. He could've paid loan interest and paused some premium payments for a while, instead of cancelling the majority of his protection portfolio.
My father’s health isn’t necessarily the greatest either. He’s under-height for his weight. :-) He has epilepsy and does have Grand Mal seizures every few years. He’s also legally blind. Today, he can get coverage… but it’s highly rated (meaning it’s more expensive) than what he would’ve paid if he would have kept his policies, borrow against them… rather than cancelling them.
Today, my father still has a “key man” policy on himself – a Variable Whole Life policy. It was originally sold as a “Supplemental Life Insurance Retirement Plan” as it was over-funded, but has a decent sized death benefit.
However, because he had cancelled his other policies, and he didn’t make payments on this variable whole life policy for about 8 years (yet the policy still stayed in force during the 2000-2002 AND through the crash of 2008 – that’s how I know it was structured properly), the ROLE of that policy has now changed… and it is now his primary source of insurance protection… and it wasn’t originally meant to be that way when it was originally sold.
Strangely enough – no one called my father regarding paying on his remaining in-force policy. It wasn’t until I had started at that particular agency when I had the policy transferred to me to be the “broker of record” on the policy and I encouraged my father to start making payments on the policy again. (No one else in the prior agency made any calls!)
Clients and Customers: Do YOU have a quality life insurance and annuity agent / advisor / consultant that YOU can count on for ideas and advice that won’t cost you and your family your protection? When was the last time you REVIEWED your total coverage - not just the amount of death benefits, but ensuring that your policy and premium payments are on track to ensure that the policy will do what you bought it to do?
Agents: (Because I know a bunch of insurance agents read my stuff): Are YOU keeping in touch with your clients so that they know they can count on you for ideas and advice to help them from making COSTLY mistakes?