LIFE INSURANCE QUOTES AND THE SLOW DEATH OF THE LIFE INSURANCE INDUSTRY
Life insurance quotes and the slow death of the life insurance industry due to legislation designed to protect consumers but has done the opposite.
The life insurance industry attracted insurance sales people from all walks of life back then. Professionals who took the whole business very seriously, people like Mike and myself who were ethical but found the whole thing hysterical and conmen who saw the opportunity to make big money at the expense of unwitting clients and who gave us all a bad name. It was, however, the fault of the life insurance companies who failed to regulate themselves; often turning a blind eye to mal practice, introducing poor and inefficient products and bad practices that caused the government to intervene with a number of measures that killed off many life insurance companies. An industry that was worth billions and provided employment to millions of people is in its final death throws.
Start of article about the demise of life insurance.
Previous page about life insurance.
The problems were and still are that few people ever think about buying life insurance and in all my years selling life insurance, no one ever called me up and asked to buy a policy. Life assurance has to be sold, it is never bought and is looked upon as a necessary evil by only the most responsible of parents.
Commissions needed to be high to offer the kind of income potential necessary to make the tough and destructive lifestyle worthwhile enduring. The problem is, this also encouraged the occasional crook into the business and this filtered right through to the top of the industry.
The Financial Services Act was a necessity but was a rock the government was using to crack a nut. Only those of us in the life insurance business saw the long term implications and the consequences of making it all but impossible for salesmen to make sales.
Twenty years ago, the man from the Pru and other insurance companies of the same ilk would have ensured that every household had an insurance policy to at least cover funeral costs and
an endowment policy that ensured people saved on a regular basis. The direct sales, commission only companies looked after the middle classes, selling whole of
life cover, pensions, investments and unit trusts. On the whole, we made sure that the UK was a nation of savers who were taking responsibility for our futures and our families.
Now we are a nation of borrowers owing more per capita head than any other country and hardly a penny saved by the average household. Most people don't have enough
life assurance and most are not saving a penny towards retirement. The steps taken to protect the British public have ensured that they are less protected than they ever were.
Life Assurance companies have gone bust, merged or simply stopped trading. There is no one out there actively selling life insurance, hardly anyone entering the industry and the average age of the few remaining financial advisors is 58 and most are looking forward to retirement.
LIFE INSURANCE DEATH BENEFITS
I would be the first to agree that the life insurance industry was far from perfect. There was a lot of miss selling and the industry needed cleaning up. Instead it received the death penalty and millions of people have suffered and will continue to suffer as a result.
And was it so bad anyway? I never met a widow who refused a cheque from a life assurance company when her husband died. It may have been inadequate at times but at least she didn't have to go cap in hand to social services to help with the burial costs. Nor did I ever meet anyone who declined their pension benefits although many wished they had contributed more.
The life insurance companies employed millions of staff. They generated huge levels of revenue that were invested in the stock market and property portfolios. It was what the government called invisible earnings and the people who generated this income, the life insurance salesman, got little thanks for it.
Instead, as a result of a few bad apples the whole of the life insurance industry was put under the microscope and bureaucrats who had no idea of how the industry worked and little concept of the important role we played because of their own secure little jobs and retirement benefits made up rules and regulations that crippled the economy. Rules that were created by little grey men who had never had to go out and earn a living. Smug little people who, full of their own self importance have continued to destroy an industry without realising the consequences of their actions.
The Northern Rock affair is just the tip of the iceberg where the FSA have failed dismally because they employ such low calibre people yet have made huge compensation payouts to the civil servants responsible for this mess who were forced to retire as a result. Gleefully looking after their own whilst continuing to wreck a once great industry.
And the insurance companies, because of their greed, failed to police themselves and were then exposed to actions that sentenced everyone involved in the industry to a death sentence.
It could all have been so simple. A letter sent to a client once they had bought a policy explaining in simple terms that the policy they had bought was a life insurance policy and not a pension or savings plan. Or vice versa. A receipt that had to be sent back to the insurance company confirming that they had received the letter and understood the consequences of their actions. And proper internal policing to highlight sales people who were acting unethically.
This would not have been difficult, as salesmen we all knew who the crooks were and so did their managers and sales directors. You only had to look at the sales
figures to know who was up to no good, it didn't take an idiot but it took a bunch of idiots to come up with a solution and a bad one at that that killed off the
life insurance industry without any death benefits.