Spent almost three weeks of my undivided time and attention on preparing for the California state exam to become a licensed insurance agent in the lines of life, accident and health policies. My effort may well be overkill, as I could have received my license by now if the entity for handling license exams, PSI, had not screwed me up twice. I was scheduled to take the exam at 12 PM on June 29, and PSI could not even find my schedule by 11 AM on that day and had to reschedule me on 6:30 PM on July 3rd. This time again the online exam could not be launched, even though I logged in 30 minutes ahead of time and did everything needed to set up my surrounding, my computer, my video and audio right for the exam (the system kept saying “You are all set to go!” but just won’t go.)
It’s incredible PSI did not have a single warm bodied human being online or offline for me to call in case of emergency. You would think they arranged at least one person on duty any time someone is taking the exam, but no. The customer service number ended at 5PM my time. I could only leave an email message to explain what troubles I ran into, and so far nobody responded to my case.
Not that I need to buy more study time. The exam takes 195 minutes with 150 multiple choice questions. I have finished two simulate exams with 93% and 94% right, while California only needs a passing score of 60% correct.
To look at the positive side however, it’s never completely a waste of time to study more toward a thorough understanding of the rules, history, regulations, players, reasoning and basic facts in the industry, especially when you want them to become your second nature at the time when you are talking to clients.
Speaking of clients, they are the first reason I want to become an agent: to help people make one of their most important financial decisions of their life. If anything, the pandemic taught us the lesson how important it is to plan our lives ahead of time and to prepare for the rainy days. Hopefully more people now would consider buying insurances than ever before. As more families are thinking about saving some money for the future, investing into one or several insurance policies simply makes sense.
Also because of the pandemic, selling insurance policies through zoom or phone calls now is entirely feasible. I must admit that being able to work from home is very appealing to me. In the old days, agents must knock people’s doors and sit down (if people let them in) to have face-to-face chats with prospective clients before signing the applications and collecting initial premiums in exchange for insurance policies.
Look at how much one year’s time has changed things! Independent insurance agents, those not working for just one insurance firm but several on a commission base, would just buy the contact info (initially just their phone numbers) of the “leads” who showed interest in buying insurances, and pick up the phone to call them and set up a time for a video interview over Zoom. During the zoom call the agent will collect information — financial and health background — from the potential clients to assess their “insurability” and if qualified, would recommend the best insurance policies based on their needs and wants. At the end of the zoom call the agent will help the client to fill out an application, have them “DocuSign” it and then send it to the insurer for underwriting consideration. The efficiency is ten times higher than the old days.
Based on my chat with one insurance agent last month, he was able to finish 30 insurance applications in a week while staying at home. This is a golden time for selling insurance, especially for the mortgage protection or redemption policies that are one type of (decreasing) term insurance.
And insurance firms, more accurately insurance agency firms, all wanted me — after I uploaded my very short vita to ZipRecruiter showing my experiences in teaching finance and accounting courses in college. Americans really appreciate teachers at colleges, even though I must say I have met my fair share of professors who are neither smart nor with the right attitude for their work — just like in any other business or industry.
Keep fingers crossed before some “bad apples” would ruin the current system to have clients complaining to the regulators, who then would stop the zoom based system and order us to go back to the old face-to-face mode of business!
In sum, being an insurance agent has four appealing advantages: It allows me to use my people skills to help clients; it uses my mental power, not physical movements like driving Uber/Lyft; it allows me to work from home and not tied to a particular physical location; and finally it allows a good opportunity to gain financial independence!
It is also a good idea to do something with a main and a side goals to reap more from the same effort. While I have been studying for passing the exam, I have also kept my mind alert on how and what we can learn from the insurance business. Below are some of the things coming to me when I was studying.
Insurance Says A Lot About The People In A Country
Chinese care more about their offspring than any other people in the world, especially their long term material well-being. Yet it is interesting that they never came up with the idea of forming an insurance business or industry. Of course, China now has insurances but they are imported from the west.
My take is that of the two fundamental ideas behind insurance, risk pooling and the law of large numbers, Chinese can intuitively understand the law but it is the notion of risk pooling that they have problem with. Chinese families have thick walls and each family simply retains its own risks instead of sharing them with other families.
Another reason is that Chinese, especially ancient Chinese, did not want to talk about accidents and deaths, the two frequently encountered terms in life and health insurances. Even today, persuading someone to purchase a life insurance policy in case of sudden deaths, disabilities or dismembers is still something of taboo, something entailing bad lucks.
It’s therefore not an accident for insurance business to start in western Europe, where the family walls were never too thick to prevent them from thinking of risk pooling or loss sharing. People there also had little problem talking about accidents, death or disabilities.
Insuring Pure But Not Speculative Risks
Another thing we can learn from insurance is to insure against pure — but not speculative — risks. Pure risks are those only entailing losses, no gains, while speculative risks are those with either losses or gains, like in gambling or casino.
More specifically, risks are the potentials for losses, while perils are the direct and immediate cause of loss, which differ from hazards that are the conditions and situations for losses. An insurance policy sometimes will name specific perils to cover, such as icy road for driving or DUI. Other times no named perils.
The focus is clear: We should deal mainly with concrete, tangible and immediate perils and hazards, and leave speculative risks out of the table — for the simple reason that they are not insurable.
In international affairs, more specifically on diplomacy we should address the same pure risk that can only lead to losses — sometimes mutual and shared losses — not speculative risks. What are examples of speculative risks? Intention of countries is one, such as “We will never let China dominate the world!” Another speculative risk is values and ideological preferences, which are not subject to short term diplomatic negotiations and we are wasting our time to even put them on the table. It is a good idea to leverage values and ideologies among like minded people or countries, but not to countries holding different values.
As far as I can see it, allowing different values and ideologies to exist in the world is a good thing — even for the US. The US made fewer international mistakes during the cold war era, because the former Soviet Union forced the US to think twice before sending troops to another country.
This is not saying that all ideologies or values were the same. No they are certainly not! There is no question that I believe the American way is superior to the Chinese way, and I wish in the long run all the countries in the world would eventually possess the same power, strength and resources as the US does. Yet in the short or even intermediate runs, we should see that not a single system wins out in all aspects.
For example, I watched briefly the ceremony in Beijing on July 1 celebrating the 100 birthday of the Chinese Communist Party, and noticed immediately that nobody was wearing mask. Apparently China’s way of fighting the pandemic has its advantage — even at the cost of demanding more than one billion of people to act in the same way. But the thing is, as long as the Chinese are not complaining, we should simply accept it as one efficient way of dealing or fighting the pandemic — even a better way that helped China avoid 605,000 deaths like we have seen in the US.
After all, having high tolerance of differences has become a highly useful testing ground for separating true from fake democracies. One common trait shared by all weak or inefficient democracies, from India to Turkey, is that they all have a low domestic tolerance of different ideas and preferences. China is one of the worst in this regard, especially after Xi Jinping took power.
However, it is also important to keep in mind that the US has a high domestic tolerance or a high patience toward different people and preference not because the Americans were born with pro-democracy bones or blood, but because Americans have essentially bought a “reciprocal insurance” policy to self-retain the risk among themselves against tyranny and dictatorship.
If this is confusing, just watch the movie A Few Good Men again. Toward the end, Jack Nicholson asked Tom Cruise to address him “Sir” and then he turned to the military judge and commented that “I don’t know what kind of lousy system you are running here!” Guess what the judge said right away to Nicholson? “The counsellor will address the witness appropriately, and the witness will call the judge “Your honor” as I have certainly earned it!”
My point is that when it comes to domestic affairs, Americans all proceed with cautions because they know other Americans will not tolerate their misbehaviors or abuse, which would most certainly inflict negative consequences from others. Nobody for example has suggested forced vaccine shots in all states, even though the US has failed its goal of having 70% of people vaccinated. Similarly, nobody has suggested to put Trump in jail before he runs for a second term, regardless of how many Americans would just like that!
When it comes to international affairs, Americans seemingly have much more freedom in suggesting their preferred ways of fighting, defeating or imposing their preferences on China — for the simple reason they thought there was no need to enter a mutual insurance or risk sharing policy with China. It takes visionary leaders (like Bernie Sanders) to realize that we indeed need such an insurance policy in international affairs just like we do in this country.