TLTR: In this article, we explain how you can choose a life insurance agent who will meet your needs at an affordable price. We tell you what to look for in a good life insurance agent and what questions you should ask them.
Life insurance policies are complex and they can differ from each other substantially. Rather than going it alone, you’d be smart to find a life insurance agent who will help you find the right policy and provide you with ongoing service. With that goal in mind, we’ve prepared the following guide.
Types of Life Insurance Agents
First off, be aware that there are two classifications of insurance agents:
Captive agents: They primarily represent one insurance company.
Independent agents: They represent various insurance companies. It’s an important distinction because captive insurance agents usually provide you with policies only from their primary insurance company. Captive insurance agents will only offer you policies from other insurance companies when the primary company does not provide a policy the client wants.
You should understand that a captive agent is a paid representative of a specific insurance company. As such, the agent’s first duty is to the insurance company, not the customer.
How To Choose a Good Life Insurance Agent?
Finding a reliable and suitable agent is important to ensure you get the right insurance policy. Here are some valuable tips that will help you find the best life insurance agent to suit your needs.
Referrals to a life insurance agent are helpful, depending on the source. Professional advisors like financial planners, attorneys for estate planning, and accountants will usually provide you with trustworthy referrals. However, the referrals should be evaluated to make sure that the agent is right for you.
When choosing an agent, look for someone with at least three or four years of experience under their belt. (Only choose an inexperienced agent if they can work with someone with experience who will guide them through the process.) All in all, an experienced agent will have a better understanding of insurance policies, and they will make sure you get the policy you need.
A good life insurance agent should maintain a baseline of insurance product knowledge and competence and have education relevant to life insurance.
You should check with your state’s insurance department to ensure that your agent is properly licensed and in good standing. Make sure you check their license status online, which is easily accessible. The agent selling a life insurance policy must be licensed with the insurance department in the state where the agent insurance policy is sold.
While you check on state licensing, you should also check to see if complaints have been filed against the agent.
Questions to Ask a Life Insurance Agent
You should never be afraid to ask questions of your agent. It will help you understand them better and give you a sense of whether they will be able to provide you with the insurance policy that you want. Not sure what to ask? Here are some suggestions:
Do you represent only one insurance company? If the agent only represents one company, then they may not be able to provide you with a variety of life insurance quotes and offer you sufficient choices.
How do you choose which type of policy to recommend? Make sure your agent is thinking in terms of the most affordable insurance that truly suits your specific needs.
How do you keep informed? A good agent follows a policy-review process on a regular basis so that they stay up to date on what’s available and any changes that may have been made to policies.
Are you following a specific code of ethics? An agent who has a professional designation or is part of an agent association has a code of ethics that they need to follow. The National Association of Insurance and Financial Advisors (NAIFA) is the life insurance agent association.
A good life insurance agent’s role is to help you in the process of getting the policy that is best for you at a reasonable price. An agent should understand your financial and insurance needs and provide you with the appropriate insurance. That makes it very important that you shop around to find the right agent and have a good, communicative relationship with them.
Frequently Asked Question
What should I look for in a life insurance agent?
While choosing an agent you should look for someone who understands your financial status, your income, and also your estate tax brackets.
What characteristics are most important for an insurance agent to have?
A good insurance agent should have experience and expertise about the insurance they are selling. Good communication skills are also necessary.
What are the disadvantages of using an insurance broker?
An insurance broker might lack understanding about terms, conditions and policy exclusions.
What is the difference between a life insurance agent and a broker?
Both the life insurance agents and brokers provide you with quotes and policies. The difference between them is that an insurance agent represents insurers, while an insurance broker represents the client.
What is a life insurance advisor?
A qualified life insurance advisor is someone who will listen to you and help you assess your needs. They will also help you find the right life insurance product.
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