Information about an insurance adviser can be found at the state’s Department of Insurance in which they are licensed to sell and service insurance. If you’re wondering what you should know about your insurance adviser, you need to come here.
Additional information can be found at the National Association of Insurance Commissioners (NAIC) and the Financial Industry Regulatory Authority (FINRA), if applicable.
NAIC is a regulatory support organization, which is governed by the chief insurance regulators from the 50 states, District of Columbia and five U.S. territories. They have established standards and best practices that are continuously regulated.
FINRA is the largest independent regulator of securities firm whom do business in the United States. Their mission is to pursue investor protection and market integrity, which is carried out in every aspect of the brokerage industry.
Both of these services will review the following information.
How long have they been a life insurance adviser and what percentage of their practice is life insurance?
They should gather and discuss your basic personal financial information, such as income, assets and debt. This should give them an understanding of your insurance needs and goals, which are typically different. Needs are necessities, while goals are desires. Unfortunately due to cost and reality, a middle ground is often made.
Everything should be in writing, which includes all proposals, illustrations and any additional marketing or advertising materials.
If they don’t know something, they should admit it. And, they should either volunteer to research it themselves or suggest a specialist.
They keep your life insurance portfolio up-to-date by continuing education, reviewing your situation, and discussing new products that may be suitable for you.
Every industry has a variety of designations, making it a challenge to determine which ones carry any weight. The insurance industry and the financial service industry as a whole have been faced with a wide range of designations.
In summary, there are two types of designations:
Agents may earn designations, such as Chartered Life Underwriter (CLU) and Life Underwriter Training Council Fellow (LUTCF). Agents who also are financial planners may carry such credentials as Charted Financial Consultant (ChFC), Certified Financial Planner (CFP), or Personal Financial Specialist (CPA – Pf).
These designations indicate that the agent has completed advanced training, passed rigorous exams, and is serious about professional development.
However, the CLU is the only one that specifically focuses on life insurance only and is by far the most comprehensive in the life insurance area.
Designations for “Sale” or “Rogue Designations”:
These designations can be earned through simplified courses over the Internet or by attending weekend seminars. Meaning, they do not require any level of in-depth studying.
However, they may be close enough in name or sound impressive enough to imply mastery of a certain subject. This has become a source of concern for regulators and U.S. legislators.
The American College provides information and support in this process called the “Designation Toolkit”, which is available here. This includes tools for companies to use in evaluating the quality of professional designations and for advisors regarding how to use professional designations with the public.
All of the previous information will help you get a better understanding of your adviser’s professional background.
By Tony Steuer, CLU, LA, CPFFE
Tony Steuer is an author and advocate for financial preparedness. Tony Steuer, CLU, LA, CPFFE, helps people make sense of the financial world in a way that’s easy for them to understand. His books including, “GET READY!,” “Insurance Made Easy,” and “Questions and Answers on Life Insurance,” have won numerous awards. Tony is the founder of the GET READY! Initiative which includes the GET READY! financial organization system, the GET READY! Financial Preparedness Club, GET READY! Podcast, and the GET READY! Financial Principles, a best practices playbook for the financial services industry. Tony served as long-term member of the California Department of Insurance Curriculum Board. Tony is regularly featured in the media including the New York Times, the Washington Post, Fast Company, and other media. He has also appeared as a guest on television shows, such as ABC’s “Seven on Your Side.” Visit https://tonysteuer.com/ to join the GET READY! Financial Preparedness Club and access free resources.