Every insurance agent I know says he or she sellsvalue. When asked to define what value is, sometimes thingsget a little interesting because there isn't really a standarddefinition. For some it's charging more and providing more;for others, it is charging the least for the mostcoverage. But the thing that will really provide value to yourprospects and clients is your good advice. Keeping people outof insurance trouble is always much better than getting them out ofinsurance trouble.

Currently there is a financial talk show guru who gives adviceon a wide range of subjects to guests and callers. On one show acaller had been asked by a friend to co-sign on his auto loanbecause he had a bad credit score. The caller wasunderstandably concerned he would be on the hook for the loan if heco-signed and would have little control of the situation, but hereally wanted to help this person out. The host of the showsuggested the caller buy the car in his name, make the payments,let his friend use the car and collect what he could from thefriend to offset the payments and taxes. If the friendcouldn't make the payments, the caller could at least sell the carbecause it was titled in his name.

You're probably already ahead of me on this one, but what aboutthe insurance? Obviously the person buying the car would addit to his insurance policy, but if he added his “friend” as adriver and the friend didn't have a good credit score, how wouldthis affect the rates? Would underwriting even go along withit? If this person had a loss, how would that affect thepolicy? If the friend had a loss in a car not titled in hisname and he was not carrying any insurance himself, how would aloss that exceeded policy limits be handled? Who would thecourt look to for the additional payments? The financial gurudid not pursue this line of questioning.

My thought was, how about helping the friend out with bus or cabfare so he could get to work and back? Why provide alifestyle for them? My wife and I had dinner with WarrenBuffett's daughter, Susie, one evening and she told us about herdaughter (Warren's granddaughter) who was riding the bus back andforth between home and college. She hadn't saved up enough tobuy a car so this was the mode of transportation that worked forher budget. If the granddaughter of one the richest men in thecountry can ride a bus, maybe someone with a bad credit score cando the same thing until they get their financial life undercontrol.

There was another financial guru a few years ago named CharlesGivens, Jr. He wrote several books, including WealthWithout Risk and More Wealth Without Risk (apparentlyyou can never get too much of a good thing in the wealtharea!). Givens was on the Today Show, held seminars all overthe country and generally appeared to be very successful. Then he was sued.

The transcript from the trial was fascinating and included notonly himself, but his son, Charles III. The lawsuit involved theGivens' advice to drop uninsured motorist coverage. One ofthe seminar attendees did just that and was killed by an uninsuredmotorist. The transcript indicates the following exchange withCharles III:

Q: What is uninsured motorist coverage?

A: I have never carried it. I am not exactly sure.

Q: What is universal life insurance?

A: It is more expensive than term. That is my knowledge ofit.

I should mention that the Givens Organization is a big supporterof “Buy term and invest the difference.” Do you thinkprospects and clients might want to receive advice from someone whoactually knows the difference between the various coverages andproducts before they act on a suggestion to buy one or theother?

In an adult education class I taught at Washington University,we covered uninsured and underinsured motoristcoverage. During the break, one of the students approached meand said he had been carrying the minimum limits of UM and UIM foryears. That was what had been offered to him by a directwriter and he had not questioned it. The interesting thingwas, this person had a law degree. Once it was explained tohim, he decided he needed much, much higher limits. What wasthe value of the advice I gave to him in the class?

An agent I met with recently, Ron Peach, who owns an agency inSt. Louis and various locations in Illinois, told me he asked hisprospects and clients what their “catastrophe number” was. Hewants to know how much, out of pocket, the person can handle beforeit becomes critical or catastrophic for them. He then appliesit to auto insurance, homeowners, life, disability and health—notto sell more insurance, but to make sure they understand what willhappen in each situation. The example he gave was someonebeing disabled who had 6 months of living expenses in savings butwould then be on the street. Using a 6-month waiting periodsaved a nice bit of money and allowed the customer to purchase thecoverage needed without overspending on insurance. In otherwords, Ron Peach provides good advice.

If you are working on your “elevator speech” (explaining whatyou do for a living in a very short time), you might use somethinglike, “I help people make the very best use of their insurancedollars by discussing their specific situation and giving themadvice that, in some cases, could save them hundreds of thousandsof dollars in expenses.” At least I know you could do that forfans of a certain financial guru who are getting generic andsometimes questionable advice.