A dictionary definition of trust: “A psychological state where a person accepts vulnerability based upon positive expectations of the intentions of another”.
There is a lot written about the bad rap insurance salesman have… How the vast majority are really good folk with only the best of intentions.
I agree. Most are really great people. They’re salespeople, they wouldn’t have any degree of success in this business if they weren’t loaded with personality. And I expect if they were running around trying to defraud people, they would lose a licence.
Not at all my argument.
Great personalities and honourable intentions do not therefore lead to financial proficiency. And that’s my argument, the depth of knowledge.
Life Insurance is a financial contract. It should be understood that way, it should be purchased that way. You should be able to select an appropriate product based on the financial truths without the influence of any personality.
But that isn’t our reality. The literacy required to deal with the mathematical depth of insurance products is not a requirement in our industry. To obtain an insurance licence in Canada you have to pass a very basic exam. That’s it. No formal education in any field, never mind a related field.
Products have changed – a once simple death benefit has been replaced with complicated investment components.
Attempts to improve transparency in Canada have been frustrated by the industry’s successful efforts to temper proposed reforms. So as the industry strives to keep compensation details buried, the products themselves have become much more complicated; so complicated in fact, that most consumers (and brokers) are challenged to truly understand, in any meaningful detail. Compensation often is most lucrative for the most complex products. The result is that a broker may very well earn the biggest paycheck by selling a product neither they (or you) have any ability to dissect and analyze. The sale becomes all about the cursory fluff.
Let me repeat “the vast majority are really good folk with only the best of intentions”. I believe that, I do, but it doesn’t guarantee capability.
Financial, mathematical, analytical capability… those elements operate outside of trust.
One plus one equals two whether you trust or not. Insurance products are complex financial instruments built on mathematical platforms… so much more than a concept.
I’ve been doing product analysis in one form or another for more than 30 years. Consistently over that time, I’ve found the vast majority of clients have wrong (or missing) information.
I don’t think you should trust anyone. Demand the proof.
I don’t expect anyone can offer you that proof without a significant amount of investigation and effort. All too often I hear salesmen say “I guarantee it”… useless. They may believe it, I’m sure they really do, but only the contract and the insurance company have that power… and therein lies the proof you really need.
You should have the ‘why’, the ‘what’ the ‘how’ in writing. You should know specifically what assumptions are being used to create those answers. You should know the minimum guarantees and the worst case scenario.
In writing. In writing. In writing.