In matters of life, death and life insurance, you don’t bend the rules.

There will be times when you’ll have to go to extraordinary lengths to stick to those rules, but it’s worth it to ensure clients get the best possible service.

Case in point: Earlier this year, I arranged for two clients to fly into Toronto from Florida for two hours so they could sign an application for a specific life insurance product. (I couldn’t go to them, because I was already flying to Ottawa to meet with other clients.)

Why the urgency? The insurer was going to take the product off the market soon. It was a great fit for these clients, and I wanted them to apply before it was too late. Problem was, they were on vacation during the eligibility window.

Since regulations state the forms need to be signed and witnessed by a licensed agent on Canadian soil, after a brief telephone call they agreed to come back to Toronto.

One of my associates was waiting for them when they arrived at Pearson International, forms and pen in hand. Since the flight is more than three hours each way, this was a serious time commitment for them.

What about technology?

Source: Towers Watson Life Insurance CFO survey #29, December 2011

We could have faxed or e-mailed a scanned version to the clients, and not have interrupted their vacation. But while technology has advanced, the regulations haven’t; electronic delivery would have violated the rules and nullified the contract.

My clients were amazed at the rigour required, but understood we had to follow the rules. It’s impossible to witness a client’s signature if you’re both in different cities on the date the form is signed. And signing an application on behalf of the client is illegal.

In some places, regulations that protect policyholders will only be in force if the application is signed in that jurisdiction. Signing outside the jurisdiction could create significant liability for the advisor. Your licence must be valid in the same province in which you do business with your client.

If you have a client who’s out of your local jurisdiction, check with the legal department of the insurance company for the process to follow.

We should never put a client’s financial security at risk simply because the rules seem too onerous. There is always a way to execute under the letter of the law—even if it means dipping into your travel fund.

Clients want personal service

In Canada, 82% of life and annuity clients polled in a 2012 global Ernst & Young insurance survey said personal interaction was fairly or very important. To ensure a customized approach, E&Y suggests insurers:

  • Stop relying solely on intermediaries
  • Use publicly available data to anticipate life events and proactively reach out to clients
  • become more effective at selling to employers, and access their employee data to identify customers’ changing circumstances.

David Wm. Brown, CFP, CLU, Ch.F.C., RHU, TEP, and a member of the MDRT. He is a partner at Al G. Brown and Associates in Toronto.

Originally published in Advisor's Edge

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