INSURANCE
How to: Y
FIND AN INSURANCE AGENCY
ou probably think you only use insurance when you file a claim, but you’re wrong. We’ll go into why you’re wrong in a moment and show you why that misconception has made shopping for insurance needlessly unpleasant all these years. But first, let’s take three common situations: Marty was divorced with a teen-aged daughter and a 10-year-old son with a learning disability. Money had been tight with only one breadwinner, and savings for college just hadn’t grown as fast as the kids did. A technical job in a medical lab produced a comfortable living, if not lavish. That is, it did until a tingling in Marty’s legs over a few weeks led to a doctor’s diagnosis of Lou Gehrig’s Disease at age 38. Within six months, Marty was in a wheelchair. In another four months, the disability prevented any meaningful work, and suddenly the family had no paycheck. If not for disability insurance, Marty and the kids could not have survived. Richard wasn’t a health nut, only a rabid tennis player who liked to hike with his sons’ scout troop. He stayed in good shape, though, and made a good pair with his wife, the prettiest woman among any of their friends and a popular teacher at her elementary school. Like most families, there was a mortgage, car payments and balances on several credit cards that Richard repeatedly vowed to pay down. Though he had a growing law practice, Richard could see how rewarding it could become with just a few more years of hard work. When he told his tennis partner his head hurt and he needed to sit for a moment, no one could have guessed Richard would die on the bench of a heart attack at age 41. Without his life insurance, neither boy would have ever made it through law school to follow in Richard’s footsteps. Lee was proud of his home, though it might have seemed simple to many folks. It gave him a good feeling to sit before the fire in the living room some times after his son and wife went to bed, just reflecting on how lucky he was. He’d had some tough times in his 22 • LOG CABIN DEMOCRAT | HOW-TO GUIDE 2012
career and seemed to be finally getting ahead when his employer closed its doors. The time it took to get a new job had drained his savings and forced him to sell his truck for something more affordable, but he had kept his head above water somehow. One night, he pulled the screen across the fireplace as he always did -- a habit formed when he was a volunteer firefighter before he married. He climbed the stairs and slid into bed next to Linda. By the time the smoke alarm woke him, Lee only had time to get everyone out of the house and see the log that had rolled out of the fireplace before the smoke grew too thick. Of all the fires he had helped extinguish, how sad that he couldn’t save his own home. If not for the insurance check, he would have never been able to rebuild. These true stories aren’t meant to sermonize, though they do illustrate three of the most critical needs for protection. Instead, they’re intended to demonstrate the role of insurance. Marty, Richard and Lee’s families didn’t just benefit from their insurance when they got a payoff check. They benefited everyday they were protected. If Marty, Richard and Lee had had to save enough money to replace their incomes or homes on their own, they would have never had any money left over for anything else, let alone trips with the kids, a nice car or even an occasional meal out. A manageable premium paid to their insurance companies allowed them to devote the rest of their money to other uses. Obviously, our first responsibilities are providing food, clothing and shelter for ourselves and loved ones who depend on us. Every moment you purchase that protection from an insurance company frees you to thrust your energy into other pursuits. Finding an agency that looks at insurance the way you do As long as insurance companies have paid commissions to agents, there have been a few bad apples motivated to sell what has the biggest commission rather than what makes sense for the customer. You’re right to instinctively want to avoid these guys who don’t have your best interests at heart.
You can avoid them by finding agencies focused on more than the next commission check. Smart agents recognize that they’ll be more prosperous in the long run by giving good enough service today to keep their clients coming back and referring their friends. Look for an agency that asks about your needs and goals rather than talking immediately about insurance products. An agency should share its know-how as a consultant of sorts to analyze your risks and design a program to manage them. You should ask what experience and professional training the agency’s staff has beyond the legally required continuing education. Professional designations such as chartered-life underwriter, certified financial planner demonstrate a commitment to comprehensive risk management beyond merely pushing the same products at every potential customer. That means that the agency should have a range of products so that the right option is available for your individual circumstances instead of having to convince everyone into buying the same solution. Professional agents tend to have professional outside associates, lawyers, accountants and appraisers, who round out their team. They are comfortable working with other professionals and aren’t afraid to refer clients to them. So shy away from an agent who can’t give you the names of professionals he or she has worked with. Finally, you want an agency that will be there in case you do have to file a claim. Purchasing coverage online or over the phone isn’t much of a bargain if no one is there to go to bat for you or to help you manage the proceeds during the recovery period. Stability and longevity are vital when it comes to long-term services like insurance protection. As you change your understanding of protection to something you benefit from daily, you can see how important it is to work with a professional agency. You wouldn’t pick your physician because of a flyer stuck under your windshield or an online ad. So, use the same care in selecting your insurance professional.