FIC Ethics

As a field agent with the Knights of Columbus, I work with members access their fraternal benefits with us. The most valuable of these benefits is our insurance portfolio–various forms of life insurance, retirement annuities and long-term care insurance. Advising members on these issues require a great deal of training–both initially and continuing–and it requires members put a great deal of trust in that knowledge.

In the insurance industry, one way that agents try to quickly show the depth of their knowledge is through advanced designations. Basically, a set of coursework designed to help an agent advance in his knowledge of the field. I’m currently enrolled in a program that, when finished, would result in a “Fraternal Insurance Counselor” designation.

This initial program has an ethics requirement, which exams separately.

Overall, ethics is common sense when looking at work through Christian lens. Don’t lie. Don’t say a product is something it really isn’t designed to be. Make sure members know what they’re looking at, with all of the pros and cons outlined. Don’t try to replace someone’s insurance to help your numbers. (There are a few times where replacing life insurance makes sense, but it isn’t the norm). Don’t trash-talk your competition. It’s fair game to discuss the difference in ratings between companies, to explain what it means that the Knights of Columbus are certified by IMSA, but be clean in your discussion.
Sadly, there is a reason this course must be taken and why it is tested separately from the rest of the material.
Insurance agents, generally speaking, have sometimes not played fairly. The general public knows little about how life insurance works, what different types of policies do what exactly, what policies have what guarantees, and so forth. Some folks have purchased a variable universal life policy without realizing their death benefits are not guaranteed.* When they get a letter in the mail saying their $100,000 policy for $30 a month that they purchased 20 years ago either needs to be funded at $150 a month for the same benefit or for $30 a month, their benefit would be greatly reduced, without ever realizing that could happen, it’s a bad day for the insurance industry.
That’s why I like working with the Knights of Columbus. First of all, we don’t sell VUL policies. There are people and situations where those policies make sense, but, in my opinion, life insurance is to provide death benefits to families. It’s there to take worry away. VUL/UL policies can’t take all of the worry away because of the nature of the policy. The real reason I like working for the Knights is that, even if we did offer policies like that, we would be crystal clear on how they work.
Ethic courses shouldn’t be needed. No one should think it is right to do anything that would violate the simplest ethical standard — the Golden Rule.
* One disclaimer: Each company and each type of policy have different times of riders (subcontracts that “ride” on with the primary insurance contract). There are riders that can guarantee VUL benefits for certain time periods if certain conditions are met, almost always for an additional fee. Generally speaking, a vanilla VUL policy would not guarantee death benefits since the policy is tied to the market.







2 responses to “FIC Ethics

  1. Arlen Millard Avatar
    Arlen Millard

    How is it that VUL Policies can be sold? Was this an example of what the President of the United States was talking about? When he said something to the effect, that we have to do something about what is being sold to seniors.

    1. Brandon Kraft Avatar

      Maybe. VUL policies have a place within the wider financial tools market, but in my opinion, usually the folks who don’t really care about the money (in the sense of they have enough of it so if any one particular investment fails, they’re still fine). I wouldn’t expect VULs to be the problematic product to seniors as much as unsavory annuity products that can be constructed to really lock folks into it in unexpected-at-time-of-sale ways.

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