Rude awakening: insurance agents need to recognize the advantages and responsibilities of their independence and communicate them better to the public. (Selling Insight: Life/Health).

We never seem to learn. It seems to take a whack on the head to get our attention. The recent article about life insurance agents that appeared in a well-known business publication was more of a wake-up call than it was the indictment it purported to be. In the article, the writer suggested that career agents' behavior is policed by carriers and that independent agents tend to be unscrupulous loose cannons roaming the countryside preying upon unsuspecting, ill-informed consumers.

Articles such as this pose a serious trap. The first reaction by independent agents and those who work with them every day is to rise up in indignation and go on the attack. Such efforts are often emotionally satisfying, but rarely beneficial.

Instead, we can move past our anger and recognize that there are several important messages for the life insurance industry, and agents in particular. If we miss them, it will be to our peril:

* More governmental regulation does not offer consumers adequate protection. What does it take for us to learn this lesson? Regulation didn't save Enron, Arthur Andersen, Adelphia or a host of other giant companies. Greed drives dishonesty and ultimately destroys shareholder value, jobs and retirement plans.

It was only a few years ago when the idea of employees taking responsibility for their retirement planning was viewed with alarm. We were told that was just too much for the average American to handle. Have individuals made mistakes with their retirement money? Of course. Are more of us learning from our mistakes and those of others? Absolutely. Over time, we are going to get better and better at it.

And it shouldn't come as a surprise that those who manufacture and sell retirement products continue to improve their offerings. Education produces these results, not control.

* Every insurance agent is an independent businessperson. Yes, that includes career agents. Of course, there are life insurance agents who will sell anyone anything that offers the biggest paycheck. That issue aside, life insurance agents are in business for themselves and recognize that the only way to stay in business and grow a solid customer base is to deliver what is in the customer's best interests.

Every life insurance brokerage firm handles cases for career agents, even when their companies insist that they sell company products. Why? Because what the customer needs isn't available from the primary company's product menu. Career agents have become remarkably more independent over the past 20 years.

Independence is a plus in the life insurance business.

In the article mentioned above, the writer attacked cash-accumulation products, describing how a customer was misled by an independent agent into buying one. There are a number of systems available to agents that advocate the benefits of cash-accumulation products. As it turns out, the systems are endorsed by some of the nation's premier life insurance carriers who have a vested interest in selling these products. If used appropriately, they can benefit a consumer. This is why those who do it right want companies to ban those who don't or at least deal with them more sternly. Unfortunately, the very legislation and regulation advocated as a solution by the article protects the rights of these agents, making it difficult to get them out of the business.

The independent agent best serves his or her customers when armed with the broadest possible access to life insurance programs that offer an exact fit for a particular individual.

Where does all this take us? It suggests a third message to be heard:

* The life insurance industry has failed at educating the public--at aggressively taking its message to consumers. We have left it to the less-than-well informed and our competitors to tell our story.

If you want to see how to do it right, just look at what Charles Schwab did recently when a major competitor was hit with a $100 million fine for allowing sales issues to influence their analysts' objectivity. Charles Schwab led with a no-holds-barred advertising program in major dailies offering strong assurances of objectivity, including no commissioned sales.

We have a good story to tell. Life insurance products deliver on their promises. Whatever the face value--whether it is $10,000 or $10 million--that's the amount of the check. Each time. Every time.

Instead of castigating the writer of the article in question, perhaps the life insurance industry should give her an award. It might very well be a light bulb.

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