Whatll You Have? Riders For Every Appetite
Advisors tell us how theyre dealing with the barrage of company offerings
By Linda Koco
“People know what they want, but they dont always know how to get there.”
That is Beth Scott Claytons explanation of why advisor input is so important when the client is making insurance decisions, especially about options offered in various insurance policy riders.
A disability insurance agent and broker with MassMutual based in Nashville, Tenn., Clayton allows that it is always easier to use packaged policies that have base coverage and options all rolled into one product.
But if the product is not packagedthat is, if it offers a base contract plus a variety of separate riders that can be added or not, depending on the case”that allows customization,” she says. It also helps the insurance professional help the client make informed decisions, she says.
The comments came as part of a National Underwriter inquiry into how professionals are approaching their work with riders today.
The subject comes up because insurers are pumping out countless numbers of riders for life, annuity, long term care and disability policies, and some agents report it is hard to keep up with all the options, changes and permutations.
“Agents are getting bombarded,” says Robert Brodie, an LTC agent with Robert Brodie Insurance in Ventura, Calif. “That can be a big problem. The companies are trying to get ahead of the game [by coming up with new features or provisions in the riders], but my opinion is a lot of the agents are getting confused.
“Unless you sit down and go over it, you may not do the right thing by your client,” he says.
Tom Hendershot, CEO of Hendershot Financial Group, Gaithersburg, Md., says reps in the 403(b) and annuity markets are being bombarded, too.
Most companies are pretty good at providing information and education when they debut a new annuity rider or enhancement, he says. “But some companies send out too much [material], and the rep gets totally confused.”
In his own practice, Hendershot adds, “weve decided that if it will take us more than 5 minutes to explain it to someone else with clarity, well stop selling it” or wont even start selling it.
To get that clarity, he and other experts say information is key. That is, financial product providers need to offer strong education and supportand advisors need to spend time listening and learning.
At many life insurance companies, there is something new coming out at least every 6 months, points out Jeffery Hardwick, vice president and managing director in broker-dealer distribution for Safeco Life and Investments, Redmond, Wash.
Some reps are getting lots of e-mails and faxes about those riders and enhancements, he says, but that may not be the best way to keep abreast. His advice? “Dont look at the paper. Listen to the wholesaler” who comes around to explain it.
“The companies that care about your work will go to the expense of sending people into the field to show you it works,” he says. “They will help you determine if it fits into your practice.”
The time spent with a company representative or wholesaler is well spent, Hardwick maintains. In addition to learning about the new rider, the rep can pick up information about the market. Wholesalers talk to the biggest competitors in the industry every day, he explains, “so there are always things you can learn.”