Those of us in the insurance business help in many ways in the course of our daily work routine.
How? As trusted advisors, clients frequently contact us with problems and seek help, not only with insurance questions but also with situations not related to insurance. From my own experiences, I've found that the first step to becoming a trusted advisor is being an "insurance hero."
The synagogue and the caterer
In 1970, a New York synagogue contacted me to review its insurance, as it was facing a substantial premium increase.
The on-premises caterer's business was booming, and the synagogue's insurance costs were increasing because it was required to name the caterer as an additional insured on its policy — and therefore would be paying to cover the caterer's insurance exposures.
I attended a heated meeting between the caterer and the synagogue's board. This was a synagogue with a kosher caterer, but even though I was new in the business, I felt something wasn't kosher.
I asked, "Why is the synagogue required to include the caterer and pay for its exposures?" The board and the caterer immediately responded that the contract required it. I asked to see the contract. Out came the contract, and there it was — stipulations requiring the caterer to name the synagogue as its additional insured, not vice versa. For years, the caterer's insurance costs had been passed to the synagogue. So to make peace and do business, they both blamed their former attorneys for the confusion.
I was a hero to my client, the synagogue. But that's not the end of the story.
The caterer was a full-time stockbroker, and worked catering on the side. Impressed with the work I did for his adversary, he asked me to become his insurance broker. I was a hero to my new client, the caterer. The caterer eventually became the leading stockbroker in his company, and rose to become president of one of the largest stock brokerage firms in the country. He remained our insurance client for 45 years. When he sold his catering business, we became the insurance broker for the new owners.
The lawyer and the insurance broker
As the insurance broker for a graphics company, I was contacted by employees who were leaving to start their own company. They felt my agency did a good job with the firm's insurance program and asked if we would be willing to handle their insurance coverage, too. Shortly after signing a lease, they held a planning session with their accountant, attorney and insurance broker — me. They wanted a professional team of advisors.
During the discussion about the firm's insurance, everyone was in sync until I spoke about the need for business life insurance, including key man and funding a buy-sell agreement. The attorney objected, and accused me of trying to "practice law."
"Besides," he said, "the company was just formed, and it's premature to talk about this insurance." Then he said, "Maybe you are pushing this now because you are interested in the commissions!" He said he would do extensive legal research to determine what was needed and urged the clients to postpone this discussion.
After the meeting ended, I met with the three owners and explained that even if the shareholder's agreement and other legal work was not yet completed, policies could be applied for. They agreed to apply for $1 million in life insurance (this was 20 years ago). Policies were issued and paid for.
A few weeks later, the president of the company, aged 40, died at the gym from a heart attack, leaving a wife and three young children. The widow received $1 million from the life insurance policy, and the remaining two owners received the deceased's shares of stock and the business continued. The widow remains a client of the agency.
Let us count the ways
Often we review insurance policies only to find loss payees listed who should not be listed, mortgagees on policies when the mortgage was paid years ago, and high-value homes still carrying original low limits of insurance.
By questioning current beneficiaries on old life insurance policies or reviewing beneficiaries on 401(k) policies, IRAs or group life that are no longer correct, we often discover potential for terrible consequences. What the customer perceives as heroic deeds are part of our routine day's work. Who else is capable of offering this kind of advice? That's how we become trusted and valued advisors and build long-term relationships.
To all you heroes out there: Send me your stories. I would love the hear them — and maybe share your heroics, too.
Barry Seigerman is an independent broker/producer. Contact him at bmseigerman@gmail.com. Opinions expressed in this article are his own.
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