Bonus Insurance Tip: The best kept secret in the industry
Filed under: Insurance
This post is part of a series where personal finance expert Dan Solin provides 10 insurance tips no one else will tell you. See all 10, plus one bonus tip!What if you had an uncle who was an expert in all aspects of the insurance business? He was retired and no longer sold any products.
What a great resource! He could sift through all of the confusing presentations and illustrations and tell you which policy was best for you.
Here is the next best option. Consider using a fee-only life insurance advisor. They are the best kept secret in the insurance industry.
These advisors receive compensation only from their clients. They will agree in writing to accept fiduciary responsibility (unlike your agent -- see tip #1) and will act solely in your best interest.
They can assist you in picking the right kind of insurance product, designing a policy that suits your needs and reducing the commissions involved in the sale.
Hourly fees vary, starting at $250 an hour. Many evaluations can be done in under 10 hours. More complex situations will require more time.
When you consider the amount of premiums you will be paying over the lifetime of a policy, this can be an excellent investment. Often, a fee-only insurance advisor can save you many times his fee.
There are a small number of fee-only insurance advisors. Among the better known ones are Scott Witt, of Witt Actuarial Services, Peter Katt of Katt & Company and Glenn Daily. I have no affiliation with any of these advisors.
You can find others by searching for "fee-only insurance advisors" on an Internet search engine, like Google.
See 10 more insurance tips from Dan.
Dan Solin is the author of The Smartest Investment Book You'll Ever Read (Perigee Books 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, June 24, 2008).
Reader Comments (Page 1 of 1)
9-07-2008 @ 10:01PM
the93rdkid said...
Interesting how this "unbiased" insurance "expert" names three people you can contact for this so-called "fee-only advice". Why name any? That's like the guy a Baskin Robbins telling you that he has dozens of flavors...but he only lets you taste vanilla. By the way, in order for any agent to be able to sell you any company, he/she must be contracted with them. So unless Mr. or Mrs. "unbiased" fiduciary is appointed with every single insurance company (and there are thousands), it would be damn near impossible for he/she to give you the absolute best deal available.
Here's some real advice: shop around, read the fine print, deal with companies and agents that have been around awhile. An agent who really has your best interest at heart (and nobody is a boy scout in this industry) will want to keep you as his customer and make you a referral source. The best way to do this is to treat you right.
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9-07-2008 @ 10:03PM
Dan Solin said...
The fee only advisors I mention, and others you can find doing a Google search, do not sell insurance. They simply give advice to consumers about which policies, from which companies, best suit their needs. They have no interest in who (or whether) the client purchases insurance from or in any other aspect of the transaction.
In their fiduciary capacity, they provide unbiased, objective advice which most consumers do not receive from their insurance agents.
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9-07-2008 @ 11:11PM
LsCarlisle said...
Why are'nt there more of these advisor positions around?
This makes so much more sense in the industry in order to get the right products for specific needs met. I personally would like to be one of these advisors than an agent representing one or two products.
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9-09-2008 @ 11:33PM
Eric L said...
Most people are only interested in price
My practice is Business P&C with specializations in Hospitality, Trade Contractors, Food MFG and Professional / Management Liability...I have acted as agent, broker & consultant. Ive seldom met a businessperson whose Risk Management / Insurance budget was under $10,000 who was interested in anything more than price.
That sub $1k / month flies under radar and is effectively a nuisance
cost
9-09-2008 @ 5:29PM
Plooshy said...
The whole article, he talks about various insurance products... yet doesn't recommend anything particular. He doesn't say "one of the better known insurance companies is"....or "I recommend so-and-so insurance company or agency..."
This is fine as he sounds unbiased... Plus, he frowns on naughty insurance salesmen getting commissions...
To me, he just lost any credibility by recommending some "fee only" insurance advisiors. For all I know, they could be his friends or business associates and any business these advisors get from anyone that reads this article are going to throw a nice little commission back to Mr. Solin.
Sorry, but that wasn't nice of Mr. Solin to try to gain out trust like that... and then, with the last words of his article...actually name names... pretty devious actually.
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9-13-2008 @ 1:27PM
L Gillespey said...
I followed the instructions and did a google search on 3 individuals named in this article. results; nothing. Then I did a search for: no fee-insurance advisors. Results: Nothing. It seems Dan Solin - AOL's expert on 10 things your insurance agent won't tell you.....will be a speaker to your group and I Isuspect it's for a fee or he'll sell you copies of his books or he'll talk to you about the products he offers. Be sure and ask if he works for a fee or is paid a commission. Beware of individuals who will tell you that others in the business are less than honest however you can trust me. Why ? " Because, I'm me."
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9-15-2008 @ 11:58AM
carmen said...
WALLET POP IS EXACTLY WHAT IT SAYS IT IS A POP ON YOUR WALLET. YOU CAN CALL THE AGENCIES PERSONALLY AND REQUEST THIS INFORMATION. THERE IS NO NEED TO PAY ANYONE FOR GETTING YOUR CREDIT REPORTS. THEY ARE AVAILABLE FOR FREE. THERE IS NOTHING FREE ABOUT THIS SO CALL FREE OFFER. SHAME ON AOL FOR WASTING THE TIME OF THEIR SUBSCRIBERS WITH MISLEADING INFORMATION. THIS MESSAGE IS FROM " I'VE HAD ENOUGH AND I'M NOT TAKING IT ANYMORE." NOW I HAVE TWO WORDS FOR WALLET POP AND AOL. POP THIS.
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9-15-2008 @ 8:52PM
Barry Flagg said...
At the risk of breaking my arm patting ourselves on the back, the the best kept secret in the industry is www.theinsuranceadvisor.com, who publishes empirical data on the pricing, performance and suitability of life insurance products. In the same way that the advice of fee-only INVESTMENT planners would be severely impaired without independent INVESTMENT research (e.g., Morningstar), the advice of fee only INSURANCE planners is only as good as the information to which they have access. While it is certainly true that fee-only planners will generally agree in writing to accept fiduciary responsibility for their advice and, that they compensation arrangement is aligned with acting solely in the best interests of the client, the only way for any insurance advisor to demonstrate that their recommendation is truly in the best interest of their client is to do so with independent and empirical research. Without such independent and empirical research about the pricing and performance of the a given life insurance products relative to its peer group, the fee only planner who recommends only some small number of low-load products suffers from limitations as some commissioned broker who is licensed only with some small number of insurers. Either way, the only way to know that the client's interests are being best served is to measure the pricing and performance of whatever product under consideration as it relates to peer group alternatives.
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