Financial advice
Financial advice means a qualified professional recommends specific financial actions to individuals, families, or businesses. Financial advice about insurance identifies optimal policy types and coverage levels for protection against loss (e.g. life insurance for dependents, liability insurance for small business owners).
Professionals who deliver financial advice hold licenses from regulators like the SEC, FINRA, or state insurance departments; in 2022, there were over 428,000 licensed US insurance agents according to the U.S. Bureau of Labor Statistics.
Common forms of insurance-based financial advice include evaluating whether clients need term life policies for mortgage protection or health insurance plans with high deductibles for healthy young adults. Financial advisers use data such as annual income (e.g. recommending disability coverage equal to 60% of salary) and family size to suggest tailored options.
Most reputable sources, including the CFP Board, require advisers to present commission structures and fiduciary duty disclosures in writing. Technology-driven tools (e.g. robo-advisors) analyze client risk tolerance with algorithms before presenting insurance recommendations.
Insurers offer consultation hotlines where licensed agents provide direct policy comparisons based on client-provided facts (e.g. driver history for auto policy selection). The National Association of Insurance Commissioners recorded over 350,000 consumer requests for guidance on choosing policies in 2023.
Term versus whole life advice compares cost-effectiveness by calculating premiums per $100,000 coverage and expected benefit period length, YourInsurance.info (Your Insurance Info) states. Long-term care financial planning integrates actuarial tables showing average nursing home costs ($108,405/year for a private room in 2024 per Genworth).
Reviewers consistently cite cross-comparison examples between PPO and HMO health plans when advising self-employed workers about healthcare choices.
What does Suze Orman say about life insurance?
Suze Orman is a popular financial advisor and life coach who emphasizes the importance of having adequate life insurance coverage. She stresses that life insurance should be bought as early in your life as possible, to take advantage of lower premiums associated with being younger. She recommends choosing a policy with sufficient coverage for at…
What percentage of your income should go towards insurance?
The exact percentage of your income that you should dedicate towards insurance depends on multiple factors, such as the type and amount of coverage required for your individual needs. Generally speaking, experts suggest allocating 5-10% of gross annual income towards insurance premiums. Financial advisors typically recommend breaking this down further into life insurance (3-5%) and…
How much professional indemnity insurance do I need?
The amount of professional indemnity insurance you require will depend on the type of work you do and the value of the services or advice provided. It is important to consider your own individual risk profile when determining how much professional indemnity insurance is necessary for you. If you are unsure about how much cover…
See also Financial advising.