Excerpts from Life Insurance Fiduciary Ethos ©
Life Insurance:
Life insurance is one of the most widely recognized tools of risk management planning. It is a contract between the policy owner and the insurer, where the insurer agrees to pay (1) a designated beneficiary a sum of money upon the occurrence of the insured individuals' death (or, if so provided in the contract, a specified amount upon proof of terminal illness or critical illness; (2) the policy owner an amount equal to the cash surrender value in the contract upon request or at a certain age.
Ethos:
The distinguishing leadership characteristics, sentiment, moral nature, guiding beliefs, and decision-making doctrine of a person, group, or institution.
Life Insurance Fiduciary Ethos© is best described as a standard of excellence in the process of providing unbiased life insurance analysis and design; defining the framework of a planning environment that is unbiased and adheres to the responsibilities of a true fiduciary.
Life Insurance Fiduciary Ethos© is based on a framework of Principles and Process. These Principles have been established by the Uniform Prudent Investors Act (UPIA) of 1994, and our Process follows the traditional five-step planning process used by fiduciary investment professionals (Analyze, Strategize, Formalize, Implement and Monitor).
To properly execute each step of the five-step process, there are essential characteristic requirements; these are identified in qualities such as: Intelligent, Innovative, Decisive, Courageous and Honest. Also central to the process is an ongoing need to assess performance, align objectives, and make any necessary adjustments.
Definition of Risk Management:
- To ascertain exposure….
- To analyze impact….
- To recommend options….
- To use insurance as a leveraged avenue of protection against identified risk....
Roles among Financial Planning Industry Classifications:
It is important not only to identify the role that each professional classification serves in the Financial Services Industry, but to understand the responsibility of each role.
Insurance Agent – This classification is primarily true in the relationship of a “captive” agent, one who writes business for one company (or primarily one company).
Insurance Broker – Agents who are licensed with multiple insurance carriers and present themselves as acting on behalf of the client to obtain the most competitive advantage.
Registered Representative (RR) – The RR who is a Captive Agent will be affiliated with a B/D that is owned by the insurance company to which they are captive. Whereas most RR’s are registered with a B/D that provides multiple companies and products from which the RR can choose.
Registered Investment Advisor (RIA) - A RIA is a person or firm in the United States who has registered with the U.S. Securities and Exchange Commission or state regulatory agency.
It is important not only to identify the role that each professional classification serves in the Financial Services Industry, but to understand the responsibility of each role.
Read more on details, characteristics & procedures within Life Insurance Fiduciary Ethos©, which is now available online through the Members Only section of our website.