Insurance agents can be vital to your financial future, yet between politicians and late night comedians, we have earned a bad, and undeserved, reputation. While it is in poor taste to judge people because of their religion or race, it is acceptable to make fun of insurance agents in America.
I will admit that there are some insurance agents who are nothing more than crooks. Fortunately, they are few and far between. My unscientific estimate would be that those who are thieves represent fewer than 2% of agents.
There are also rookies in the nation’s agency population who have not been around long enough to know all of the insurance options available to people. If they are not overseen by a more experienced insurance agent, they will make honest mistakes, just like any other profession. It takes time for people to learn and master new skills and insurance professionals are like any other professional.
If a mistake made by an unsupervised rookie insurance agent ends up costing you something, it can be frustrating, but your state’s department of insurance will often require the insurance company to make you financially whole. (Sadly, there is no amount of money that will replace emotions of bitterness, frustration and anger.)
Having started my career as a life insurance agent, I understand the turnover that takes place with rookie insurance agents. I’ve seen it. Often times managers do not decide on hiring an individual because he/she would make a good insurance professional in the future. The hiring decision is based on how many friends or family members he/she can sell policies to. It is no wonder that comedians and politicians have the idea that insurance agents are nothing but well-dressed sales people.
At any given time, my unscientific estimate, would be that roughly 2/3 of the insurance agents in America are rookies.
Those agents are decent, honest folk who truly want to help their clients but may be hampered because they have limited experience. It is a good chance that they have been thrown, by their managers, into the deep end of the pool and told to “swim or drown” with only basic instruction. They are sincere, but they are sincerely inexperienced.
If my unscientific estimates are anywhere close to being true, it means that roughly 1/3 of the insurance agents available are both decent, honest folk who want to help you, and have the years of experience working with insurance to know how to best help you protect yourself from unexpected financial loss.
Just like an apple is a fruit but not all fruits are apples; an insurance professional is an agent but not all insurance agents are professionals.
As you look for an insurance agent to help you, there are things you need to remember that insurance professionals cannot do.
WE CAN’T READ MINDS
One of the biggest frustrations that I have had during my career is spending hours to work out an insurance strategy for someone only to have them tell me, when I present it, “That is not what I want.”
When you meet with an insurance agent for the first time, he/she is likely to ask you several questions. Please be honest with him/her.
Those questions are not just because he/she is nosy or an attempt to manipulate you. He/She is wanting to develop an insurance plan for your needs. If all you want is a plan to cover you in the event of a accident, he/she will likely recommend a simple accident insurance policy. Those are typically very inexpensive.
However, if what you tell him you want is something with all the “Bells & Whistles” that is require under Obamacare, he/she may be able to help you with that, as well, but the premium is going to be much more expensive.
(Be very careful if your insurance agent attempts to sell you an insurance product before he/she asks you any questions. That is a sign that you have accidentally hooked up with a rookie agent, who has been trained improperly, or one of the few crooks in my industry.)
WE CAN’T ADJUST PREMIUMS
If your insurance company assigns a rating or surcharge to your account, your insurance agent can help you understand the extra charge or even help you submit an appeal to the insurance company or governmental agency that assigned the surcharge in the first place.
However, insurance agents do not have the authority to remove a surcharge/rating. That power rests in the company/agency who assigned the rating/surcharge in the first place.
Some insurance products, like Universal Life or Annuities allow you to change premiums from time to time. Others, like Long Term Care insurance make periodic offers to increase your benefits with an optional premium increase.
Other plans, however, have a set premium that cannot be changed regardless of how many times an insurance agent or insured asks.
If your state offers a “Free Look”period for insurance, (most do) make sure you review your new policy during that time to verify that the premium fits within your budget. After the state mandated “Free Look” period has expired, there can be few options other than starting from scratch with a new application.
WE CAN’T GRANT EXCEPTIONS.
Over the last 30 years I have had several individuals ask me why something was not covered. Sadly, in many cases, their options were slim and none.
The fact is that different insurance products work in different ways. While one policy may cover one risk, and allow you to use a specific provider, there is no guarantee that another policy will work exactly the way the first one did.
Take Major Medical “health insurance”, for example. PPO & POS type plans allow a person to use any doctor/hospital desired. HMO & EPO plans limit coverage to only doctors/hospitals who are in the plan network.
PPO & POS plans cost more than HMO & EPO plans. If you only want to pay the smallest premium available for “health insurance” it is likely you have a HMO or EPO type plan, but understand that if you get seriously ill in the future and want to go to a hospital that is not in your plan’s network, your insurance agent is not going to be able to get the insurance company to grant you and exception and allow you to get treated outside of the plan’s network.
If you elect to get treatment outside of your plan’s network, you may, but you will have to pay 100% of the bill with your own money and not rely on any help from your insurance company.
The only way to protect yourself from future surprises is to take the time to understand what your insurance policy will, and will not cover. If it will not pay for a risk that you want covered, your only options are to find a supplemental insurance policy that will cover that risk or “self-insure” for that risk and be willing to pay those medical bills in the event that loss occurs.
In other words, take the time to understand how your insurance plan actually works and not just assume that it is the same for everyone.
To contact The Insurance Barn to see what an insurance agent can and cannot do for you, use the form below.