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Insurance Financial Advising Concepts

Table of Contents

Introduction
Court Case
Individual Case
Conclusion
References

Introduction

The job of insurance financial advising is to work with clients and offer them consultation on their capital. For people who do not have high knowledge in this area, competent and professional help is important. Employees of this profession give advice on all financial aspects of interest to the customer. This includes taxes, investment measures or insurance. To do this, a special plan is developed that meets the lifestyle of a particular person. Among these, whole life and universal life insurance and selecting a life insurance policy stand out.

Whole life and universal life insurance are two different types of human life insurance. As a rule, they include two half-points, which are that they have a savings or investment and an insurance part of the contract. This distinguishes them from term policies, which increases premiums accordingly. In addition, customers have the opportunity to take out loans in proportion to the monetary value of the policy.

Despite their similarities, the two types of insurance have some fundamental differences. Whole life insurance aims to provide coverage for a persons entire life, regardless of the age at which they die (Law & Zuo, 2021). In addition, beneficiaries will be able to receive benefits after death if the client regularly pays insurance premiums. Thus, it combines coverage and storage for a lifetime. The insurance is aimed at the implementation of long-term planning and the savings part allows the person to increase the monetary value.

Universal life insurance offers a more flexible system for each client. Each person has the right to vary the death benefit and pay contributions in the desired amount, subject to restrictions. During the replenishment of the payment, the finance is automatically placed on the investment account and the accrued interest is sent to the clients individual account. The increase in interest is due to deferred tax and generates cash value. A person can change the death benefit if the circumstances of their life change (Law & Zuo, 2021). In addition, the cash value can be used towards the payment of contributions, if the amount in the bill allows it.

The task of a financial advisor in these matters is to draw up a plan and choose the right insurance. In this case, the worker takes into account the age of the client, his state of health and wishes regarding the elements of the coating. Additionally, conclusions are drawn based on the clients retirement planning, risk protection and investment (McKillip et al., 2018). The consultant is interested in the opinion of the client and together they develop an analysis of financial needs, current insurance and tax status.

Court Case

The consultant must be conscientious in their work and offer clients suitable insurance with transparent payments. Otherwise, it can lead to litigation and problems with subsequent employment. Attention and honesty is evidenced by the lengthy litigation Gregg v. Ameriprise Financial Inc. In 1999, financial adviser Robert Kovalchyk offered his services to Gary and Mary Gregg regarding their investment and insurance needs (Gregg v. Ameriprise Fin, 2021). He offered to give up insurance policies and arrange them in another organization, and the couple followed this. As a result, the Greggs paid the consultant monthly funds to increase the funded portion. However, instead, Kovalchyk sent funds to the growth fund, which increased the commission for the family.

Later, the family received a class action notice from the company. They decided that the corporation was violating the law by demanding additional funds from them, which is regarded as fraud, and filed a complaint in return (Gregg v. Ameriprise Fin, 2021). Greggs claimed that the financial consultant misled them for personal gain for himself and the company he worked for (Gregg v. Ameriprise Fin, 2021). The couple cited non-compliance with the Unfair Trade Practices and Consumer Protection Law and the lengthy wording of the financial assistant. The case dragged on for many years, however, in 2021, the Supreme Court ruled in favor of the Greggs (Gregg v. Ameriprise Fin, 2021). Thus, the family was able to prove the length of the wording and misleading.

This situation is indicative for every financial adviser. From this we can conclude that when managing clients insurance cases, it is important to clearly and understandably explain the stages of covering the responsibility for their lives and the formation of investment and personal accounts. At the same time, consultations should disclose full information regarding the types of insurance and the services offered by the corporation (Law & Zuo, 2021). In these surveys, the consultant undertakes to clarify incomprehensible points with clients and not to use lengthy formulations. In this case, customers and employees can reach the highest understanding in order to avoid any claims.

Individual Case

However, many financial advisors are quick to get the job done, as evidenced by client stories. One of the main tasks when choosing insurance is to optimize and choose the optimal protection, considering each individual case (McKillip et al., 2018). One of the individual cases concerns the desire of the client to choose the most suitable insurance. However, in such situations, people may be overcome by doubts about the correctness and incorrectness of the change of coverage and company. The man discussed the possibility of changing insurance for himself and his wife for several years, but did not make a firm decision (Profiles of successful, n.d.). The task of the consultant was to clearly and competently present the ways of choosing and the beneficiaries that the family will receive from this.

As a result of negotiations and explanations, the client decided to change insurance. They provided an accounting king that took into account two policies from firms with which they had an agreement (Profiles of successful, n.d.). After the evaluation, the consultant concluded that the client needed more coverage items. In addition, the financial consultant helped to sort out payments and the client realized that it was important for them to have long-term care insurance. After changing the policy, the client and his wife began to pay less premiums with a more convenient way of insurance for them.

Conclusion

In conclusion, it should be said that insurance financial advising covers multiple aspects related to the life of a client. First of all, this means that age and those investment activities that a person wants to carry out should be taken into account. In addition, the essence of insurance should cover and optimize the daily ratio, percentages and points of coverage that are relevant for each individual case. If the client does not fully understand the ways of financing, they can go to court with a complaint about fraud. Accordingly, another priority is a transparent explanation of the ways and means of choosing insurance. In this case, people will receive the most up-to-date policy that will take into account the established points, the age and state of health of the person.

References

Gregg v. Ameriprise Fin., Inc., 195 A.3d 930 (Pa. Sup. Ct. 2021). Web.

Law, K. K., & Zuo, L. (2021). How does the economy shape the financial advisory profession?. Management Science, 67(4), 2466-2482. Web.

McKillip, R., Ernst, M., Ahn, J., Tekian, A., & Shappell, E. (2018). Toward a resident personal finance curriculum: quantifying resident financial circumstances, needs, and interests. Cureus, 10(4). Web.

Profiles of successful client relationships. (n.d.). ACM Wealth Management. Web.

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