New Standards and Why They Should be Favored

New Standards and Why They Should be Favored

These changes by both the CFP Board and the state of New York force long overdue reform to the US life industry. Of all financial products, life insurance remains the most complex and long-held financial product most consumers will buy. Cogent advice about which company to choose, how to adequately fund these policies and perhaps, most importantly, how to manage these policies over time requires professional advice. Those who really wish to be “life insurance…

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New York Regulation 187

New York Regulation 187

Effective February 2020 for life insurance products, the New York Department of Financial Services (DFS) established a final standard that requires life companies to put procedures in place to assure “a transaction is in the best interest of the consumer and appropriately addresses the insurance needs and financial objectives of the consumer at the time of the transaction.” This regulation, the first of its kind, represents a dramatic change in minimum standards for both life…

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CFP Board Best Interests Standard

CFP Board Best Interests Standard

While basic minimum standards to sell life insurance are low under state-based insurance laws (forty hours of training and passage of a state insurance exam), some financial advisors have voluntarily decided to distinguish themselves with professional designations with options like the CFP board best interests standard. State licensed insurance agents can obtain further training and professional designations including: CFP®, CLU, ChFC, CFA or CPA. Each of these professional designations place some additional education, ethics and…

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Current State-Based Standards

Current State-Based Standards

Under current state-based standards in insurance laws, it is the policyholder who has to determine if the recommendation and the contract are in their best interest. Under current state-based insurance regulation, the consumer may have no idea how important elements of what they were shown in an illustration could change over time or that the company can increase charges. This has always been the case with life insurance products, but it is especially true for…

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Life Insurance Regulations and Contract Law

Life Insurance Regulations and Contract Law

By and large, life insurance regulations are handled by the fifty state insurance departments and is based on contract law rather than any duty an agent has to the client. Currently, those who sell general account life or annuity contracts, must pass a relatively simple exam after forty hours of classroom or on-line learning. Under the law of agency, the agent who sells insurance does not work for the client but is technically an agent…

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The Client’s Best Interest in Life Insurance

The Client’s Best Interest in Life Insurance

Life insurance is a unique and important financial product for many clients best interest and the only product that can protect clients’ families and businesses against the risk of early death. Properly designed life contracts also allow the client to benefit from some unique tax benefits afforded only to life insurance products. But standards for life insurance advice have not kept pace with the marked increase in types of life products or the complexity of…

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