Proximate Cause And Catalysts
David J. Murphy
May 2017

Proposition:  In independent life insurance distribution, nothing happens until the life of an independent financial professional (IFP) intersects, in an impactful way, with the life of a consumer who is unprepared for the unexpected.

 To begin, we need to define a term from jurisprudence.

Definition #1: Proximate Cause  
“Proximate Cause is defined as an act from which an injury results as a natural, direct, uninterrupted consequence and without which the injury would not have occurred. Proximate cause is the primary cause of an injury. It is not necessarily the closest cause in time or space nor the first event that sets in motion a sequence of events leading to an injury. Proximate cause produces particular, foreseeable consequences without the intervention of any independent or unforeseeable cause. It is also known as legal cause.

To help determine the proximate cause of an injury in negligence or other tort cases, courts have devised the ‘but for’ or ‘sine qua non’ rule, which considers whether the injury would not have occurred but for the defendant’s negligent act. A finding that an injury would not have occurred but for a defendant’s act establishes that the particular act or omission is the proximate cause of the harm, but it does not necessarily establish liability since a variety of other factors can come into play in tort actions.” (From: http://legal-dictionary.thefreedictionary.com/proximate+cause.)

Proximate Cause as a Metaphor
The term “Proximate Cause” is borrowed in order to illustrate, metaphorically, the prime element that drives independent life insurance distribution. Proximate cause is generally viewed in the negative sense as being that one primary factor that contributed to a loss. This article will turn this upside down and use the term “proximate cause” positively, to mean that singular action conducted by an IFP that produces vital improvement in the preparedness of a consumer.

Consider the following unexpected consequences of everyday life for which many consumers are completely unprepared:

  • Dying too soon and leaving a family or business partner financially unable to continue as anticipated.
  • Developing a chronic or critical medical condition that prohibits continued income and may require considerable expense.
  • Reaching retirement age with insufficient funds to actually retire completely or at least maintain a comfortable lifestyle.
  • One’s children reaching college age and having nothing saved to offset, partially or in whole, the expense of tuition, room and board.
  • Discovering late in life that one’s savings and retirement funds have been exhausted; or in other words, outliving one’s assets.

Enter a properly-trained and motivated IFP driven by passion to help people protect their families and business partners from financial risk of loss. As in everything (science, innovation, improvement, discovery, invention, etc.), nothing happens until the right questions are asked and answered. The IFP who is armed with the right questions can become the proximate cause in the consumer’s life and will lead to particular, foreseeable consequences in the form of a plan and a product.

Sample Proximate Cause Questions:
What worries you the most about your financial future? Would you be interested in life insurance as a way to help supplement retirement income and include a self completion of funds even if you were to die prior to retiring?

  • What do you wish you could afford to do in retirement?  Do you have a plan to meet that goal?
  • Would your family continue with their lifestyle if tomorrow you developed a serious illness or died?
  • How many months or years’ worth of your income have you saved?
  • What if you could buy dollars of future income for pennies today that would be paid to your family if you died and your income stopped? How many dollars of future income would help to meet your family’s future financial goals?

Without the intervention of an IFP armed with the right questions and trained in the right solutions, most consumers will go on being unprepared for the unexpected. But for the intentional interaction of an IFP, the family and/or business partners of the unprepared consumer may end up bearing the consequences.

This is why the impact that an independent financial professional (IFP) is rightly viewed as a proximate cause in the positive sense.

Next, we need to define a term from chemistry.

Definition #2: Catalyst

  1. a substance that enables a chemical reaction to proceed at a usually faster rate or under different conditions (as at a lower temperature) than otherwise possible.
  2. an agent that provokes or speeds significant change or action. That waterway became the catalyst of the area’s industrialization. He was the catalyst in the native uprising.
    (From: https://www.merriam-webster.com/dictionary/catalyst.)

Catalyst as a Metaphor
The term “Catalyst” is borrowed in order to illustrate, metaphorically, the second most important element that drives independent life insurance distribution. In independent life insurance distribution the MGA (BGA, IMO, etc.) is the party best suited to help IFPs become the proximate cause in the lives of more and more consumers! The MGA can help the IFP improve effectiveness and therefore speed significant change in the lives of existing clients and cause prospecting to happen at a faster rate!

 Again, nothing happens until the right questions are asked and answered.

Sample Catalyst Questions: 

  • What concerns are most pressing among your clients?
  • How many families and businesses can you help to protect through life insurance this year?
  • How many of your past clients own life insurance products that do not feature the living benefits available in today’s products?
  • How much of your annual revenue originates from life insurance sales?
  • How many of your clients have you not seen in the last four years?
  • Can you state whether or not your clients are well-covered with life insurance?
  • Why are more people not buying life insurance from you?
  • Are your referral-gathering skills below average, average or above average?

Without the MGA investing time by asking the right questions, an IFP will likely not change, and the number and frequency of contacts with consumers will remain static.

Summary

  • In independent life insurance distribution, nothing happens until the life of an independent financial professional intersects, in an impactful way, with the life of a consumer who is unprepared for the unexpected. 
  • The IFP armed with the right questions and trained in the right solutions can become the proximate cause that produces vital improvement in the preparedness of a consumer. 
  • The MGA who asks the right questions can be the catalyst who helps the IFP improve effectiveness and therefore speed significant change in the lives of existing clients and cause prospecting to happen at a faster rate.

Are you ready to become that proximate cause, or that catalyst, so that the widely-acknowledged life insurance coverage gap among American households can be speedily reduced?

But for you, who is it that will remain unprepared for the unexpected?

The opinions and ideas expressed by the author are his own and not necessarily those of North American Company for Life and Health Insurance or its affiliates. North American Company does not endorse or promote these opinions and ideas nor does the company or agents give tax advice. 

Author's Bio
David J. Murphy
CLU, ChFC, FLMI, is sales vice president, national accounts, for North American Company. Murphy sold insurance after graduating from Miami University with a BA in economics. After several years as an agent he worked in marketing, advanced sales, product development, career-agency development, illustration design and distribution, agency management, agent recruiting and BGA recruiting. Murphy currently manages a region comprised of four states and 21 partner MGAs, and he also manages the company’s eight national account relationships. Murphy can be reached at North American Company, 553 Meadowtrail Court, Cincinnati, OH 45231. Telephone: 800-800-3656, ext. 87612. Email: dmurphy@SFGmembers.com.















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