This module introduces you to the concept of risk management and the role it plays in the financial planning process. Risk management includes all of the actions one can take to minimize risk. Insurance is just one of the options available, but it is an important option for financial planners to consider when evaluating the various risks to which a client may be exposed. To provide better perspective, this module will also introduce you to the insurance industry and how consumers access the insurance products they desire. Since insurance policies are contracts, we will discuss contract law and the underwriting and claims processes that follow contract law.

The insurance industry is regulated by the various states. While certain federal laws have influenced the industry over the years, each state determines how those laws are enforced within their borders. This module will explain how the insurance industry is regulated and by whom, and concludes by identifying what to look for when selecting an insurance company and agent to implement the insurance-based portion of a risk management plan.

About the Author

David Mannaioni, CFP®, MPASSM is a professor at the College for Financial Planning. Utilizing his 30+ years of experience in the financial services industry, David also maintains a financial planning practice where he works with his clients in all areas of financial planning. In addition to his certifications, David holds life and health insurance licenses in several states, as well as the Series 6, Series 7, and Series 63 registrations with FINRA. You can contact David at david.mannaioni@cffp.edu.

Complexity Level: Intermediate