As insurance agents we are called to give a lot of advice on tax consequences, drug choices, when to take Social Security, consequences of gifting prior to going into a nursing home, and myriad other specialties that intersect with our sale of insurance. While this can make our jobs fun, it also makes it very challenging to be an insurance agent today.

Let me tell you about Paul and his run-in with that legal document that most agents feel 100% comfortable with: the Power of Attorney (POA).

Paul was called to sell a MAPD for Mary’s mom, who has dementia.  Easy enough and most of us have handled such a scenario.  Mary signed as the Authorized Representative and Paul faxed in the application.  He wasn’t required to send in a copy of the POA, as the carrier contacts the client directly, in the rare case where they want proof of POA.  Mary’s sister, Lisa, also has POA over her mom and so she called the insurance company and asked to be added to the people with access to her mother’s information. The insurance company asked Lisa to fax in a copy of the POA. That POA ONLY LISTED LISA and now the company is refusing to allow Mary access to any information about her mother’s policy.

Quick spoiler alert: there are many types of POAs. One client may have several different POAs set up for different reasons.

While each sister did have a valid POA, they each had DIFFERENT powers.  Lisa did not have any power over health care decisions, only financial decisions. The poor agent was in a headspin trying to figure out what was going on and without seeing both legal documents, couldn’t untangle this.  I’m that rare insurance agent who also holds an active license to practice law, so when this landed on my desk I was quickly able to explain it to all the parties.

As an agent, you are not trained to know the difference between POAs, to tell if they are valid, or to give any counsel about them.

If a client says they have POA, you proceed to work with that person on behalf on the incapacitated person.  In light of this case, it’s good to know that POAs are not as simple as they seem. There are many different types of POAs.  Some people are very bad with money and they give up the right to take care of their finances to one of their adult children, a friend, or attorney. That doesn’t mean that the person is mentally incapacitated, or that they can’t buy their own insurance.

It is up to the insurance company to due diligence on the scope of the POA; you are not trained to do so.

I once had a client’s daughter call in and tell my assistant to cancel the policy I’d sold her mother and threaten to sue me “because she had a POA on her mother and I was going to be in trouble.”  Naturally, that got my attention as her mother, although in her late 80s, was sharp as a tack (as my parents like to say) and I was floored that she never mentioned that she gave her daughter POA, or that it was necessary.  I asked her daughter to fax me a copy of the POA. There was no document. “I’m meeting with an attorney to get one next week.”  Here is what she didn’t know: her mother would have to GIVE away the power as POA’s are made voluntarily, a daughter can’t TAKE it without going through a court proceeding to be granted guardianship.  But again, that’s more law than most insurance agents want or need to know.  I called the mother and relayed the daughter’s complaint, and the mother was furious and told me to block the daughter’s calls.  “I don’t care how old I am, I’m still going to make my own decisions and she is not going to boss me around.”

When talking to a client, I always ask if they have given anyone POA?  And if so, why?  If this question isn’t in your sales presentation, consider adding it.

Sylvia Gordon took the Indiana Bar Exam in 1993 when she was 9 months pregnant with her first child, Elliot, who is now an insurance agent. She ran Gordon Legal Services where her interests were in estate planning, prior to working at Gordon Marketing.