Buying life insurance isn’t at all like buying a TV. You’re not making a one-time purchase – usually to get the lowest price – and then never come back. Buying life insurance is more like engaging the services of an accountant or doctor, where you’re looking to establish a long-term, working relationship with the agent from whom you are buying the insurance policy.
That makes choosing the right life insurance seriously important. After all, you will be engaging the services of the agent at different times in the future, when your life insurance needs change and require new or revised policies. You need to choose an agent that you can work with successfully, and on a continuing basis.
What criteria can you use to choose the right life insurance agent?
Independent or “Captive” Agent?
Many life insurance agents represent a single company; these are referred to as captive agents. The limitation is that they only provide you with the policies that they have available through that one provider. There is no option to sell you what may be a better product from a competing company.
Independent agents represent several companies. This is a major advantage because the agent can go from company to company, searching out the best policy for your needs. This enables you to work with a single agent, will do the “shopping” for you, saving you both time and money, as well as getting you the best policy.
Is the Agent Interested in Learning About Your Needs?
Some agents put on the “hard sell”, trying to convince you to buy a specific insurance product. Whether or not the policy meets your needs doesn’t seem to be terribly important. It may be that they only sell a very limited line of policies, or maybe attempt to get you into the policy that provides the best remuneration for the agent.
The key to finding a good agent is finding one who will take the time to learn what your needs actually are. Only once those needs are established, does the agent actually look for a policy. And that’s as it should be – the agent must find a policy that will meet your needs, rather than one that works best for the agent. The only way the agent can find that out, is by taking a serious interest in determining your insurance needs.
Does the Agent Explain Insurance in Ways You Can Understand?
When you ask the agent a question, or you ask for clarification, does the agent provided an answer that you can understand? This is important – the primary reason for using the services of agent at all is to take advantage of his knowledge and experience. A good agent knows that part of his job is educating you to the nuances of insurance. If you have an agent who will do that, you’ve got a winner.
But at the opposite end of the spectrum, there are agents who may go out of their way to confuse you. They may do this so that you will be more likely to buy a life insurance policy from them if you don’t really know what’s going on. If you get a sense that you’re working with an agent like this, you need to make a break – fast.
Is the Agent Concerned with Getting You the Right Policy for You?
I’ve actually known insurance agents who only sell two or three different policies. They become completely familiar with every detail of those policies. The problem becomes that whatever your life insurance need may be, the agent’s answer is always Policy A, Policy B, or Policy C – there are no other options.
But if one of those policies is not the best one for you, no other options will be presented. You can tell a good agent because he will make sure that he gets you the right policy, because he maintains familiarity with a wider variety of plans.
Do You Feel Pressured?
Perhaps the biggest indication that you are working with the wrong agent is if you’re pressured into a certain policy. It’s one thing to have questions about a policy, but quite another to feel that you’re being forced to take it. Pressure should never be part of the equation.
A good agent knows that he has good policies, and is willing to give you a reasonable amount of time to decide what you would like to do. He also won’t overwhelm you with choices, in an attempt to confuse into taking at least one of those choices. A life insurance purchase should be a calm process.
Is the Agent Licensed in Your State?
No one who isn’t licensed by your state department of insurance should ever attempt to sell you a life insurance policy. Fortunately, this detail is very easy to verify. All you need to do is to go to the department of insurance website for your state, and enter the agent’s name. If it doesn’t come up on the website, you have reason to suspect that the person in question is only posing as agent, and could be attempting some type of fraudulent activity.
When you go on the state website, you may also be able to determine if there are any disciplinary actions pending or in the past in regard to any agent.
Does the Agent Have Professional Designations?
Professional designations don’t make someone a great insurance agent. However, a designation does indicate that the agent has invested a significant amount of time and effort into the profession. That should be taken into consideration when you are choosing an agent.
Typical professional designations to look for with insurance agents include:
- CLU – Chartered Life Underwriter
- ChFC – Chartered Financial Consultant
- CFP – Certified Financial Planner
- RR – Registered Representative
- RP – Registered Principal
If the agent that you are considering has at least one of these designations, you can feel pretty certain that he or she is a dedicated professional, and more likely to provide the type of service that you should expect to get.
