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The Need for Ethics when Selling Life Insurance?

Scott Scott , 12/5/2016
1 Verified Reviews - 5 of 5.0
The other day I was caught up in a debate with a colleague about a certain sales technique used to sell Whole Life Insurance policies.   As many of your know, whole life insurance, a form of cash value life insurance was once one of the most important types of insurances for just about every American to own.  However, those days have since past.

With the advent of 401Ks, IRAs, 529s, UTMA accounts, and Term Life Insurance, Whole Life Insurance just feels like an old stodgy form of clothing that people just don't wear anymore.    It feels incredibly dated.   A single financial product that can somehow miraculously be all things to all people.   But in comparison to funding college saving 529 plans, saving for retirement in a 401Kand Roth IRA, and purchasing level term life insurance for yourself and your spouse,  procuring a whole life policy can often seem like a bad waste of good money.   Yes, yes, there are still good uses for whole life insurance in specific situations.

Back to my debate with my colleague though.  This person was adamant that this sales pitch was the right pitch, that this was the product that these people truly need.   I believe that he was so caught up in the use of this product that all facts and figures seemed to be either wrong, incorrect, or biased.   Its rare I find people questing financial news magazines and their accuracy.

At a certain point, I needed to step back and think about what was really going on here.  I know that I had made my point, that my facts were well positioned, that the vast majority of the argument was on my side.   I also know mis-sold whole life insurance is a hot button issue for me.   Yes there are legitimate uses of whole life insurance, but many of the practices are just down right filthy.   As insurance agents, we have all sat through sales seminars that push the boundaries.  Sales ideas that seem... very one sided.   Sided on the side of commissioned agent and not the general consumer.

It can be tough, we are all charged with presenting our clients with solid solutions to their problems.    Helping them solve their problems, but not creating new ones for them.  Insurance agents, sometimes are only as familiar with a product as the training company teaches them to be.

That is where Ethics I believe come in.   As insurance agents, we need to review products and question them.  Read about products in financial industry papers and magazines and ask tough, really tough, questions.  Would I buy this product myself?   Would this product assist me in risk management  (and investments) ?     Is this a best in class product?   This is all pretty clear.

However what is often not so clear is that we need to use this method when assessing Sales Pitches too.  Is this sales pitch accurate?  Does this sale pitch portrait the true picture.

As for my debate with that colleague, I'm not trying to say that he was unethical.  However I still think the sales pitch for this product in this way was.  Is someone pitching an unethical pitch themselves unethical?  What do you think?

Thanks for listening.

Scott W Johnson, Marindependent Insurance Services LLC, Independent Term Life in California.   California License 0H11625 and 0K10734,