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Are You Really in Good Hands?

Buz Livingston, CFP
March 30, 2007

You have to hand it to the insurance industry. Tying an agent's sales production to his or her family's continuing health insurance is a great way to generate sales. The benefit for the agent's clients, however, is less obvious.

A recent report in Investment News exposes the industrywide practice of linking the sale of proprietary life-insurance products to group health-insurance eligibility and other employment benefits. For example, the National Association of Securities Dealers bans quotas on the sale of investment products, including variable annuities and variable life insurance. However, the restriction on sales quotas does not exist on other insurance products that don't have an investment component, such as term life.

A former Lincoln National (NYSE: LNC  ) advisor stated that he was required to