Government regulations in the security and insurance industry, appear to be reactions to security representatives and insurance agents acting badly. They are created to be punitive and simply not just an exhortation. Many financial professionals that cross the line are ignorant of boundaries, which could, in and of itself, disqualify them as a professional. Some knowingly ride the fence and believe there is a neutral zone governing the gray areas of the law. But there are a few whose nature has a criminal disposition and their felony convictions taint the field force at large. Intent is a heart motive that may be identified by their methods and more often their targeted audience of the elderly and the innocent through a facade of trust. The methods and approaches may be evidentiary. What is evidentiary is the blatant exaggerated benefits these carnival barkers promote.
One of the most glaring examples is the marketing mantra “Zero is Your Hero” often used with indexed annuities and indexed life insurance. The evangelists of this motto proclaim that you can never lose money. This is the great misnomer. If they meant to say that the crediting account can never levy less than zero, that is correct. But that’s not want is propagated. They maintain you can never lose a dime. The other side of the account is the policy expense loads. In a down market where the crediting account is zero, the expense loads are still deducted. And keep in mind that there can be two sets of expense loads: current company practice and contractual guarantees. The disparity between these two sets of expense loads could be quite large and if the insurance carrier needs more revenue it could increase policy expense loads. During the last decade, the S&P 500 Index posted losses 4 times in that ten-year period. Three of those years were consecutive, resulting in policy losses.
One can inflate benefits beyond their contractual imperatives. To do so invites unhappy customers who are not experiencing the benefits of ownership. It’s doubtful that any insurance agent or security representative who does this could survive arbitration unscathed.
Communication is evidentiary and can come in many forms: texting, email, regular mail, voicemail, recordings of live seminars, radio, TV and online video shows. It’s important to pull back the bravado and quite inflating the benefits beyond the contractual language. Arbitration is no less damaging to your reputation than going to court. If you don’t discipline yourself, someone else will do it for you.