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BenefitSource Insurance Services, Inc.

28 Argonaut, Suite 100
Aliso Viejo, CA 85254

Our Challenge

It seems most people we speak with are focused solely on matching their current coverage limits and the cost of their insurance policies, and not the actual risks that they are trying to protect against. The various "Save X % in Y minutes" advertising has falsely framed personal insurance as a commodity, causing many consumers to focus solely on the cost of coverage. As a result, many consumers learn at the worst possible time—after an uncovered loss. The words used by product peddlers to lure them into buying a "low cost" insurance policy mean just what the peddlers intended them to mean: save money now/never mind the protection.

Of course, consumer obsession over the search for a "good deal" is not unique to the insurance industry. Carl Richards, the author of Behavior Gap, reminds us that consumer focus on product is exploited by those who are paid to sell product. He explains, "Most of us are trained to think 'What' first, because it's what you hear about all day long. But 'What' questions should come after we think about 'Why' and 'How’. Starting with 'Why' means achieving clarity about your insurance expectations and creating a plan."

Deceitful advertising that frames cost as the only factor in buying insurance has robbed consumers of the ability to ask the larger, far more important questions. Even simple questions like, "Why am I buying this insurance policy?" "Why buy insurance for your home, for your car, or to protect your assets from lawsuits?" The purpose of insurance is to transfer large losses from you to the insurance company, isn’t it?

If you start with the ‘why’ you can shift your focus to the reason why you buy insurance and to what extent you want it to protect you. Then you move to the ‘how’ to make sure that your policies will actually protect you or least know to what extent they’ll protect you. Now you can focus on the ‘what’ – finding the best price on coverage that you actually need.

Illustrating the problem

When we review the insurance plan of a typical family, this is what we usually find:

  • Auto and home insurance with one agent. Life insurance (and occasionally disability insurance) through another agent. Both agents tend to be specialists and no effort to make sure that all the client’s major risks are dealt with, leaving them with risks either not covered or inadequately covered.
  • Car insurance liability of $100,000 per person, which is grossly inadequate in today's legal environment.
  • Home liability of $300,000 per accident, which is grossly inadequate and inconsistent (all liability limits should be the same because they're protecting the same assets).
  • No personal umbrella policy which is only way to protect against a legal settlement that is beyond the auto and home insurance liability limits.
  • Health insurance through work with no advice as to which option is best. Perhaps the plan chosen has significantly higher deductibles and out-of-pocket limits that are beyond their affordability for out-of-network coverage.
  • A $100,000 group life insurance policy which usually stays with the employer when the employee leaves. Today, the head of the household typically needs a minimum of $1 million of total of coverage. The spouse usually has the same level of life insurance or has none at all.
  • A $200,000 personal accidental death policy purchased from the mortgage company that covers only part of the risk—from accidents only. There is generally no coverage for death from an illness, which is the major cause of death at any age. The beneficiary is usually the mortgage company rather than the dependents.
  • No long-term disability insurance, unless the employer provides it. Even when it is provided, group insurance benefits usually cover 60 percent of earnings and are taxable leaving them with 45 percent of their pre-disability earnings. Most people need some kind of additional supplemental disability policy.

This mixed bag of insurance policies has no coordination, is clearly way out of balance, and premiums are being poorly allocated. If anything were to happen if would be financially disastrous.

What's missing from nearly everyone's program is a personal risk manager or overseer, someone skilled in every area of insurance who can make sure that their plan is in balance, all the coverage limits are adequate, and all the major gaps are covered. And, of course, makes sure that the premiums as low as possible.