Keep it simple: laws and documents intended to help or protect insurance policyholders sometimes backfire. (Life/Health).

It's so easy to make things more complicated than they should be. Clearly, insurance falls into this trap. So often we seem to forget what our business is all about. It's quite simple: delivering money when it is needed most. That's it.

Maybe even more astounding, this is how those buying insurance policies see it. Consumers may be far ahead of us when it comes to appreciating the value of what we sell.

The consumer's appreciation of our products comes to mind each time I see a "Replacement of Life Insurance" form. Everyone understands why the form exists. The goal is to avoid policy "churning" by greed-driven agents. But, like other attempts to "help" or "protect" consumers, this one backfires.

Can anyone who reads the replacement statement help but conclude that replacing a life insurance policy is a mistake that should be avoided? The language is onerous, to say the least.

Consumers deserve protection. They should have a clear understanding of the implications of what they are doing. At the same time, there are valid reasons for replacing life insurance policies. In fact, failing to replace a policy may have a detrimental effect on a consumer's estate or financial security.

Until roughly 30 years ago, there were few reasons to change a policy once it was purchased, since personal circumstances and lifestyles remained relatively predictable, and there were few policy choices available. Today, both of these factors have changed.

Few of us have a single career. Financial circumstances do not remain static. We have quite different needs as we move through life. The changes can be seen among our agents. Many of those who sold life insurance for 20 years or so are now becoming specialists in long-term-care products--another indication of what is happening to their clients.

In life insurance, there are solutions to every possible life situation or need. No single policy fits everyone for all time.

A form won't protect the consumer from a greedy agent. The fact that the National Association of Insurance Commissioners developed the replacement form sends a powerful message to our industry to use our resources to educate consumers on the value of our products and services. Do we consider what we sell so complicated that consumers can't understand what they are buying? If we do, we're woefully out of touch with reality. Just look at how consumers have taken to technology. Once again, we may be underestimating the public's ability to make informed decisions.

There's another issue that reflects good intentions gone awry. The impact of both the Health Insurance Portability and Accountability Act and whatever may turn out to be the "Patients' Bill of Rights" will only amplify the perception that the life and health insurance industry is a "danger zone" for business--particularly smaller businesses.

The increased paperwork and record-keeping requirements brought about by the legislation's compliance requirements and the possibility for lawsuits and settlements create a potential for enormous costs that will quickly be passed along to all businesses. But it is the smaller ones that are providing health-care coverage for employees that will feel the pain.

Wal-Mart has become the largest U.S. corporation because it learned decades ago that the lowest-cost retailer wins. The goal is to wring out costs, not to add them. To attract and hold employees, small businesses must be able to offer affordable health-care plans. When costs go up, health care goes--and so do employees. And those who remain have either little or no coverage for their families. The first to opt out, of course, are the young, thus further exacerbating the cost problem for older workers and families.

Protecting patients' rights is essential--no question about it. But we should focus on meeting this necessary objective within a context of reducing health-care costs.

Both HIPAA and the Patients' Rights proposals ignore the reality of health-care costs. What is the value of protecting people who do not have coverage because their employers cannot afford to provide it or they cannot pay for it themselves? All this might cause an objective observer to conclude that there are those who are more interested in protecting themselves than they are in serving the needs of the public. If that's so, we have failed our customers.

The insurance industry spends tens of millions of dollars each year promoting itself. If we really believe we are in business for the consumers who buy our products, then we would be well advised to use our extensive resources to educate those we serve so they will come to appreciate what we do so well: deliver money when it is needed most.

Ronald D. Verzone, a Best's Review columnist, is president of United Underwriters Inc., Exeter, N.H. He can be reached at [e-mail].