Is Your Life Insurance Agent Truly Independent (and Capable)?
Most people think the most important question you can ask your life insurance agent is “How much life insurance do I need”. Good question. But the better question is “How independent are you, how many options can you offer me, and how do I know the best plan for me?”. I know that’s more than one question, but you get my point.
For most people, buying life insurance is like jumping into the deep end of a pool. They have no ground beneath their feet, they’re in unknown territory and don’t know what questions to ask (besides how much life insurance they need), and trust that their lifeguard (their insurance agent) has got their backs.
The truth is, some do, and some don’t.
A truly independent life insurance agent/broker should be able to provide quotes from multiple companies and a review of your needs and circumstances. Buying life insurance is an important long-term financial decision. Did you spend more time buying your last automobile than you did purchasing life insurance? Hmmm.
Some questions to ask your agent:
1. Are you an agent sellingpolicies for one company?
The agent may be limited (by contract or rules) to selling policies from only one company. He or she may not be able to quote from other companies that would offer different products and rate structures.
2. Can you provide me with options from multiple companies? Do you routinely provide options from many companies? Can you even do this?
Even if not limited by contracts or rules, the agent’s knowledge and compensation may be focused on the agency’s company rather than the broader marketplace.
3. Can you review my existing life insurance policies and provide an analysis of my holdings?
There are many types of reviews, and a limited agent may not be able to run competitive quotes and analyses.
4. Do you provide third-party ratings for the carriers being recommended?
Respected, independent third parties like AM Best, Moody’s, and S&P Global assign ratings to insurance companies. These ratings reflect evaluations of the insurer’s funding, its risk, and overall operating performance. In other words, third-party ratings tell you the credibility of the carriers. This information is important for comparison purposes and should factor into your decision about which policy and carrier to go with.
5. How long have you been withyour company? If a recent change, why?
If an agent has a history of moving from carrier to carrier, that could be evidence of trying to rewrite business with a prior carrier, which could be detrimental to the pricing and quality of your policy.
6. Can you review my needs and objectives concerningmy life insurance purchase?
Life insurance can be complicated, and many factors must be considered when purchasing a policy. Determining the correct product, duration, and ownership can impact taxation and future financial situations such as divorce, premature death, or extended life.
7. Do you routinely recommend both term and permanent life insurance options?
Combining both term and permanent policies improves coverage. Permanent life insurance, as the name implies, provides coverage for life rather than just for the period of time covered by a term policy.
8. Will you provide references from current clients?
Good agents should have a roster of clients who can provide appropriate references. These agents aren’t shy about telling you how much they’ve helped their clients!
9. Can you provide an analysis of mycurrent life insurance program as it relates to my circumstances and needs?
It is difficult to judge your insurance needs without knowing the value of your current portfolio now and as projected.
Need more help?
If you are uncertain about the options available or would like a review of a proposal, let’s talk. I get a kick out of helping people get right-sized insurance policies and portfolios.
Contact Barry Koslow, JD, (licensed life insurance broker) “Your Life Insurance Insider” at Secure Benefits Northeast, LLC for a review. 781-724-6695 [email protected].