When stockbrokers who commit fraud or other sales abuses are barred from working in the securities industry, they often keep their insurance licenses. This occurs because state governments generally have separate departments regulating securities and insurance. This means that the insurance agent who wants to sell you variable life insurance or annuities may be a bad broker who, having been kicked out of one industry, is simply selling a different kind of inappropriate high commission product.
You could simply ask the agent if he or she sells or ever sold securities and, if so, whether his or her securities licenses are still active. But you also should spend a few minutes searching the FINRA BrokerCheck database. This free resource will tell you whether your agent was or is a stockbroker and, more important, it will provide a complaint and disciplinary history.
To learn more about the problems with Variable Universal Life Insurance or, as they’re often called, “VULs,” please visit our variable insurance claims website at lifeinsurancefailure.com.
Hugh Berkson is a Securities Attorney with McCarthy, Lebit, Crystal & Liffman, Co. LPA. Hugh is rated AV® Preeminent™ by Martindale-Hubbell®.
He obtained a business degree in Finance from the University of Texas at Austin in 1989, and is a 1994 graduate of Case Western Reserve University School of Law, where he was a member of the Order of the Barristers and received both the American Jurisprudence Award, (National Mock Trial) in 1993 and the Jonathan M. Ault Mock Trial Prize for 1993-1994.