Being in the health and life insurance business one hears a lot about ethics. Maybe it is because we sell a piece of paper and a promise makes people uneasy. There is no doubt that for the unethical insurance agent there has to be a lure of a quick buck on a broken promise. But those of us who have been in this industry for many years just see ethics as a “gate keeper” to keep the con artists out of our space. So, for an insurance agent what does ethics really look like?
Believe it or not we now have a month dedicated to ethics by the American Institute for Chartered Property and Causality Underwriters (AICPCU) along with the American College and the Society of Financial Service Professionals. These two large organizations spelled out the code of ethics for insurance agents. To most of us, this is called “common sense” but let’s take a look at their list of categories.
- Core Beliefs-simply put be honest. Tell the prospect or client the truth about what the product can and cannot do. Don’t lie, twist, misrepresent, omit, discriminate, slander, abuse or be disrespectful. Easy for most.
- Accountability-simply put to be trustworthy. Without morals and ethics, I am not sure it is possible to be a trusted advisor or agent. We are all accountable under the law but sometimes bad agents can skirt the law to be legal, but not trustworthy.
- Integrity-I refer to as character. I believe reputation is what others perceive you as, but character is who you are when no one else is looking. Do you always do the right thing for the client, even if it is impossible to be caught? The “yes” answer here scores one for integrity.
- Leadership-as an agency does your ethics carries down through your organization or is it to each his own? A strong ethical leader’s integrity is felt by the team. The bad agents have to go, no matter how much business they write. Ethics is nothing if not consistent.
- Professional-not just how the agent dresses or speaks but the knowledge of his products and the industry as a whole. Always striving for more education even if it is not warranted by DOI licensing requirements. Always wanting to be better for the clients and agents you work with weekly.
Our industry is an important one. If you promise to take care of that client by protecting their property or their life, you must take every step to be sure the product you put in place will do that very thing. As easy as all of this sounds rest assure it takes time, discipline and effort to become the most ethical insurance agent you can become. Your client deserves that level of ethics.
“Ethics is knowing the difference between what you have a right to do and what is right to do.”—Potter Stewart
Image by Stuart Miles at www.freedigitalphotos.net
Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger and team leader with over 27 years of experience in sales and marketing in the insurance and beverage industries.
Good article. Thank you for sharing.
Thank you Franci, I am glad you enjoyed it.
Ethics is LEARNED. These are thinga that were learned either at Mothers Knee or OVER Fathers!
I agree with Greg, Ethics are learned. We are all bad people by nature trying to do good. If this were not the case we would not have laws, or Ethics courses for that matter.
Greg, that’s where I learned my ethics over my fathers knee! 🙂 I agree Mark I think parenting helps with our moral compass. Thank you both for sharing.
Ethics have fallen out of fashion to situational rationalization. Just about any behavior can be justified if you care to debate it long enough, and as such modern society seems to have abandoned the notion that there are actually moral absolutes that work in the world at large….so now, what used to be taught from childhood onward, is now huge news, and has to be incorporated and made relevant to the business world…. Previously, we internalized ethics and morals, and applied them universally throughout our life interactions….Now it seems that we pick and choose depending upon the situation and how it suits our purpose. Hence professional organizations must spell out for us what used to be automatic responses. After all, there may well be colleagues out there who comply with ethics, just as they would any other law, because there are penalties for not doing so…but that does not mean the same ethics guide other portions of their life where the strictures are not present.
Excellent message, thank you. It comes down to world view. If you think people are generally good, like the existentialists – there you go.
But when you believe we can rise to our best, inspired and admonished by others, then you agree with the founding fathers, and the how and why’s of how they formed this great nation.
Suzan and George thank you so much for sharing. Suzan I’m not convinced that ethics is out of fashion in most business. It certainly is in our government and media. Maybe it is the fear of consequence that makes some agents do the right thing. I believe it is more likely back to childhood and learning right and wrong. I do worry about this up and coming generation. George has it right to be our best, inspired and admonished of others. Very well said by you both.
Tim, I think this is a great article!
I’m not sure that you answered your own question, but I think that we are born with the desire to be ethical. Sometimes, it may take being unethical for some to realize the error in not being right up front honest.
Many years ago, in 1969, I got my one needed lesson in “fudging”… I’d sold a DI policy to a client in Yakima, WA. A year later he lapsed it and I went to his house to ask why.
He met me at the door, and was really angry. He said, “I trusted you. I got in your car and you drove me to my bank and I withdrew $300 for my premium (annual). I couldn’t afford it, and you knew it! I don’t ever want to see you again!”
Sh*t! I have never felt so low as I did that day (June, of 1969, just remembered). I drove back to my motel, and got drunk. I hated what I had done to his good man. I swore to myself that day, that I would never, not ever, try to make a buck at someone else’s expense.
That was the only time I did too good a job of “selling”, instead of doing a good job of listening. What a lesson I learned.
A saying by the Jewish Talmudic Scholar, Hillel the Elder, circa 100 BCE, is “If I am not for myself, then who will be? If I am only for myself, then what am I? If not now, when?”
I have lived by those words ever since.
Another saying that I have found sums up what is so important for us all to remember is, “People won’t care how much you know, until they know how much you care.”
Words to live by.
Thank you, Tim, for an excellent topic.
BTW, I’ve told this story of mine to very few people. It is one day in my life that left me filled with shame. I share it here, because this topic is so apropos.
Spence, thank you so much for sharing that story. I am sure that was not easy. It was a very valuable lesson that you have carried throughout your career for these past 45 years. I really don’t believe you did anything unethical. If that man had trouble paying his premiums while he was employed imagine the trouble he would have if he became disabled and unemployed. I agree we have to do the right thing by the client but as a trusted advisor we sometimes know better than they do. Somehow I doubt you were ever unethical throughout your career. Thank you again for sharing that story, it is very valuable to the young agents starting a great career in our industry.
Ethics – I believe is a part of our life and how we live our lives. If we do not do the right thing in our business endeavors, we likely do not do the right thing in our personal life. I pride myself on good ethics both in my business and personal life. There was a time when my ethics did not agree with an employers, so it was time to part ways. Your ethics define you, and there is nothing that should alter that.
Thanks.
Tim, that is really nice, what you said about my helping him in spite of himself, and if I could justify that, I would…sometimes we never really know. That I felt so horrible, and guilty, says it all, I think.
I’ve convinced people that buying coverage is a lot more important than that 45″ TV they wanted, and have no problem with that, I’m incredibly good at educating people. But sometimes we walk a fine line.
Most importantly, I think, is that because of that day, I have always, without hesitation, put the needs of the client ahead of my own, and that is a lesson that I think many young agents would benefit from knowing. If we always put the clients needs first, then we cannot lose. And the sales will follow.
I have always prided myself on my ethics and integrity. After all, when all else is said and done, what do we really have, but our own knowledge that we are good people who care about others?
What more can any man/woman want on their gravestone but the words, “Here lies a man with a good heart.” 😉
Spencer,I agree the customer should be our focus, doing what is right for them. Do the right thing, for the right reason, all the time..even if it means walking away from the sale.
John, so right on!
Insurance Commissioners are not supposed to refer people to agents. Dick Marquardt, the former Insurance Commissioner in WA State, with whom I did battle as President of the Washington Association of Health Underwriters when he leveled commissions in LTCi (made sense for Medicare Supp but not LTCi which is a very time intensive process, often requiring at least a second and sometimes a third followup appointment), began sending me hand written Christmas Cards, AND referrals (!), after we won the fight.
My partner, Terry, came into my office one day and demanded to know why I got hand-written Cards and he got the xeroxed copies, and why was I getting referrals? The answer was simple, respect, and a budding friendship, formed when two adversaries were fighting for what they believed in, both wanting the best for the consumer.
I’ve walked away from many a sale, and found that those I told that they really had better options than insurance, began referring those friends of theirs to me, who could afford to pay for coverage. Often I would hear, “You don’t talk like any insurance agent we’ve ever met.”…and that is the shame of it. What I have done throughout my life shouldn’t be the anomaly, it should be the norm.
That’s one reason why I truly love that Tim posted this topic. This is something we all need to be discussing. 😉
John and Spence it should always come down to doing what is the best right thing for the customer. If the customer is barely putting food on the table no agent should push for the sale. But if the choice is coverage versus a new TV as Spence points out or fishing boat, we do have to push because that is the best thing for the customer. My point was loading down policies with low risk coverage to make a bigger commission. That is when ethics comes into play. I appreciate you both for sharing in this important conversation.
Unfortunately a few bad apples can spoil the bunch for any industry Often ethics is molded in us individually in the way we were raised or what is learned and applied from religious backgrounds.
Amen Jack, but those are the apples the fruit basket is measured by unfortunately.
I feel your upbringing instills ethics long before you work a single day. For the rest , it must be taught….and enforced.
Some are born with Ethics
Some Achieve Ethics
And some have Ethics thrust upon them
As long as you have them this is the right business for you. For a long lasting business model there is really no other option than to be ethical.
Nature vs. nurture discussion. Suzan has a good point in that any action has a rational explanation, but ethics goes along with the social moral norm. Having said that, it’s really tough to determine what is right and wrong in a larger context. Hitler was able to rationalize his behaviour to the German population, but he was a monster in doing so.
With mass media and being a general greater global population, general human rights and concerns have broadened the ideals of ethics. Ed Snowden is a good example of someone who felt that what a public institution was doing actually violated the rights of the people. So he openly defied his environmental behavioural requirements in order to conform to his own sense of personal ethics.
I beleive there are elements of both nature and nurture. The former allowing altruistic actions and more risky behaviour as a genetic component. This can be seen in certain personality traits passed on through generations.
Some Agents are born with a moral compass and other Agents learn from solid upbringing. However an Agent develops this all important value, he or she must also know how to use it.
You all make very great points. Thank you for sharing Stanley, Duncan, Brenton and Thomas. No worries about any of your ethics.
Some people may not have been taught the proper ethics when they were young, which is not their fault. However, as they get older, it is their responsibility to behave ethically. We always have the opportunity to learn. Sometimes we don’t all agree on what is right and what is wrong, but we have to think about our clients and others when communicating with them, and remember how we want to be treated. If we act with honesty and integrity, we usually don’t have to worry too much at the end of the day.
Nope, we are all born with inherited sin and ethics like math is learned. Romans 3:23 ” for all have sinned and fallen short of the glory of God” now I realize that not all believe in God or the Bible but it is what it is.
You should check out the Insurance Forum’s Sales and Marketing Ethics Center http://ifn.insurance-forums.net/sales-and-marketing/
Tim, selling a piece of paper which contains an agreement based on utmost good faith = selling trust = selling a “promissory note”. Ethics is a very essential element in marketing such product. In fact ethics should still be an essential element in our day to day life.
Ethics is contagious and so I believe it is definitely a learned behavior but can also be inherent to a degree. If you have a sunny, happy disposition this can be passed along through genetics or can rub off on people through sheer association. I believe ethical and moral behaviors can as well. Don’t you remember your mother always telling you to associate with people that lift you up and not that drag you down. It is the same ethically speaking. One bad apple really can spoil the bunch. Aspire to improve and to lift up those around you in the process!
This is so important to our calling, it’s not just a profession. Insurance enables people, so that real crisis hits, they are not tempted to stray from their scruples to meet a need. Everyone one else shows up with a bill, we deliver a check. This is all very inspiring.
George beautifully stated! Thank you for the reminder!
This is a great discussion! To expand, what are your thoughts on ethics with regards to data breaches? How do your ethics lead your practices for protecting information?
Bridgette,under the PHI side of the HIPAA law, agents have to protect clients privacy. Most of us I am sure use secured email, websites and shred any documents. If not, the agent is not unethical they are just plain stupid. The fines are astronomical. “
I agree that this is an important and interesting topic.
Scientifically speaking, without having advanced behavioral understanding at birth, being born with ethics in the literal sense would not be possible. However, we are all born with differing personalities which effect characteristics, and a personality type may lend some influence on whether or not a person would display ethics.
I do agree with everyone who stated that ethics in general are taught by parents or others who raised us through discussion and example. The personality type would however still influence whether or not a person would choose to implement what they have “learned”.
In the late 90s, for my master’s thesis, I actually conducted extensive research on “ethical issues in life insurance advertising,” and my hypothesis was blown out the window. Through a mega-analysis, I discovered the older one was, the more ethical, and the younger, the less ethical. I was stunned.
Of course, in the real world we cannot claim causation, all we can conclude is correlation. It appears that ethics is, to a large degree, learned behavior. Also, the mores of one community or society will have very different ethical standards than another, which complicates the entire issue even further.
If one were to get philosophical, one could ponder: is something that is legal, ethical, and is something that is illegal, unethical? Try going down that path…
How you allow the people treat with you, based on your ethical values.
@Tim There are times I wonder what happened to Ethics. It seems to be lost to a great majority these days. I remember doing business with a handshake.
Ken, that is so true. When I grew the “Golden Rule” was do unto others as you would have done unto you. Now the “Golden Rule” means he who has the gold makes the rules. Very sad turn for society.
I feel my ethics were formed around my upbringing – watching how my parents and grandparents handled themselves in business and in life. But, I think you are born with certain characteristics that help the ethics “stick” with you. I feel that materially-focused people would be more likely to be unethical, since the motivation is based on things of value rather than values themselves. If I was more concerned about net worth and luxury items, something would have to compensate for salary if I couldn’t afford them. Maybe I write policies for someone I normally wouldn’t do business with, or maybe I start placing policies with a company solely based on commission? I was raised to work for what I need first, then for what I want, but to never take either one. I would much rather answer to myself than to an E&O carrier or a jury.
I think you learn the ethics of any industry that you are in but your moral compass is developed early in life. I just feel that without a solid moral foundation I don’t think ethics will matter much to a person.
@ Tim: I love the way you put common sense in quotes because we all know that “common sense” isn’t so common.
Tim, I hate to say it but the new “Golden Rule” as you mention, will be the ruin of us all. In my 72 years, I’ve seen a lot and the direction we are going in concerns me.
Ken, it is of great concern for most of us. We have more taking out than putting in at any cost. It is a bad combination my friend. Greed at all levels is never good.
ETHICS It defines you and your business. Standing by your ethics can cost you your job (I know that). HIPAA, and the privacy requirements are a huge issue. I believe a customer should always be made aware of how the privacy laws may affect them, and business associates should take the lead in assuring employers are aware and compliant. Who would want to work with a business associate who ignored such important legislation, leaving the employer open to penalties?? Please do not ignore your clients when it comes to privacy regulations.
Thank you Margie, I appreciate your comments.
Business should start with ethics and retain the same all the time to prove that your are ethical
Always follow the Golden Rule
In all my relations with our clients, we pledge to observe the following Rule of Professional Conduct:
“I shall, in the light of all circumstances surrounding my clients, make every effort to ascertain and understand, give them that service which, had I been in the same circumstances, I would have applied to myself.”
Duke, that is a very smart way to put it. I have not seen it summed up better anywhere. Thank you for sharing it.
I believe that is the Pledge of CLUs but certainly a Rule of Professional Conduct we all ethical life underwriters should follow, too!
Seems like there are two kinds of ethics, some people think they only apply when everyone watching and then there’s people who believe it all the time. I was brought up, i learn the value of my ethics and to understand how other people valued their ethics
Very true Larry, reputation versus character. Thank you for sharing.
I was very disappointed in my last CE ethics class. What I got from it is that morals and ethics are whatever the group you are with believe. If it feels OK to you than it is. I have always said an ethics class will not make an unethical person, ethical. The class I took was similar to ones taken by co workers. That nonsence only reinforces the behavior of the people that make work so difficult for the good guy. I heard a survy a few years back that said nursing is the profession people trust the most. Used car salesmen were at the bottom. Second from the bottom was insurance salesmen. I guess I should be glad I don’t sell cars
Kathleen, I cannot disagree. Maybe the problem is the people that write CE courses are through our government. I would tend to believe politicians would be the step below used car sales people, too low to register. Just a thought. Thanks again for sharing.
All CE courses are written by people who have not been on commission. This is where the true test comes. Without strong morals and ethics those who do not possess them will have a short career in our industry.
Ralph, with all due respect, I have written many CE courses, in LTCi, and have written a book used by NAHU for CE study on health insurance, and I’ve never earned my living in any other way than by commission.
I also managed to get into law and rule in WA State an 8 hour CE requirement for LTCi, precisely because I believe in ethics and integrity, and wanted to see all agents who hold themselves out as experts, to be one.
So to say that all CE courses are written by people how have not been on commission is simply false.
It’s wise to be a wee bit more circumspect before making comments like that Ralph. Those of us who are on commissions, and still contribute to the CE requirements to keep agents, our peers, up to date, might take umbrage with that comment. 😉
Just an addendum to that last post: That Kathy’s CE Ethics course was lacking in ethics, doesn’t mean that all CE courses are written by those without ethics, integrity, or experience working in the field with the Public, and earn their living on commissions only.
We should never allow ourselves to generalize to that great an extreme.
Just as not all Liberal Democrats are incapable of holding Obama responsible and accountable for the egregious mistakes he’s made. Even a lot of Democrats in the House and Senate are truly upset with his lack of a serious response regarding the VA.
Just a word to the wise about overgeneralizing.
Duke, the golden rule is the way to go!
Spence, you are the exception to the rule my friend. I know your CE courses are spot on. I do agree with Kathleen and Ralph though, most of the ones I have taken are clearly written by individuals that have not and could not make a living on commission doing what we do everyday.
Tim, thank you for that terrific vote of support!
I’d like to think that I’m not the exception to the rule, but you do raise an important point. I became involved in the Washington State Office of the Insurance Commissioner (OIC), in the early 80’s, when then Deputy Commissioner Dave Walker started the first SHIBA program in he country (later adopted by virtually all states, as either SHIBA or SHIP (SHIBA, Senior Health Insurance Advisors, and SHIP, Senior Health Insurance Program). These are programs established by the various Insurance Departments around the country made up of Senior Volunteers who educate (?) Seniors on Medicare, Med Supps, and MA plans. As my partner and I saw that they were misleading and misinforming Seniors when we attended a meeting in 1981, and I saw a client of mine headed for the door ready to cancel the policy I sold her, I called out to Mr. Walker that he did not explain the policy provisions correctly and thereby found myself, and my mouth, involved in helping to train the trainers, Lol.
After that, I was “invited” to serve on a number of Insurance Dept. committees, and chaired a couple of them. See? You can become involved with your state’s OIC. All you have to do is be wiling to embarrass a Deputy Commissioner and raise hell. And as a number of you here probably know, I have no problem doing that! 😉 .
Once I began speaking before Health Underwriter groups, and found that I enjoyed doing so, I ended up writing CE courses, and having them approved across the country wherever I was asked to speak.
So I do agree that I may not be the norm (heck, I don’t know anyone who thinks I’m normal, lol). And an important BTW: Ralph is a true professional and I’m proud to say that we are now connected. Ralph sent me a PM and agreed that it wasn’t good to generalize to the degree he did, and I was so very impressed with the professionalism he demonstrated in doing so, that I asked him to connect, which he did.
Tim, you’ve got great people in this forum! I’m pleased to be here. 😉
When one works for a union or a franchise that has benefits equal to those of most unions, there’s usually health and/or life insurance in the package. However, does the job’s ethics reflect those of the corresponding insurance agency? A few of fast food’s “as upper class as fast food can get” franchises have health insurance full of conditions, most of which are not clearly stated in the “informative booklets” describing the package details. This leads to beneficiaries receiving nothing more or less than a nasty surprise when they suddenly find themselves in debts of hundreds or sometime thousands of dollars – none of which they would have accumulated had they known their insurance didn’t cover the services. Completely contrasting this are not necessarily larger, but higher paying companies such as travel and vacation resort advertisement companies or even well-known computer companies or bank data center machine and technician suppliers. Their insurance companies make sure they know the ins and outs of every benefit they do and do not have access or claim to. The employees of these companies are often seen as glamorous, even wealthy individuals who have the world in their hands because everything seemingly works out for them.
What is the difference between these insurance agencies? Aside from offering different packages which offer graduated benefits, what makes an insurance company believe their clients or customers don’t need the extra information about how their package works and exactly how far their benefits take them? Do people need to work for the most reputable and high paying jobs to “earn” decent treatment from their health insurance agency? Or do employers decide what type or insurance their employees deserve?
Your point is a valid one. Here is the disconnect in your scenario. The agency works with the employer usually HR. Once the benefit selection is made, then the enrollment is usually passive. meaning the agency is not allowed to speak or communicate with employees. The employer is disseminating the information down to the employees. I personally believe employers want the best benefits they can purchase, but they do have a budget. Benefits will always fluctuate from company to company, industry to industry the same as pay. Sometimes it is hard to breakdown compliant information into simpler terms for an employee to fully understand. I am not sure this is violating ethics as much as trouble with the communication process. Thank you for your question.