Who do you want on your team? That’s the question you have to ask yourself when determining how to choose a life insurance agent.
I think it’s safe to say everyone wants to be on a winning team. I’ve never met anyone who says, “I’d like to be picked last on the mediocre team.“
During baseball season you will often hear about a team who has been having issues within the clubhouse. Usually it’s personality conflicts. The team doesn’t come together. And it shows on the field.
In most cases, a person has an accountant, Realtor, attorney, financial planner, pastor, doctor, etc. You may even have a butcher or a lawn care guy. These are your go-to people for specific situations.
People you trust.
How do you choose a Life Insurance Agent? Here are some things for you to contemplate.
Internet Shopping versus Insurance Agent
It depends on your situation and what your expectations are. Some people prefer having an advisor, while others go for convenience.
Obviously shopping on the internet offers a simplicity. You could sit on your couch in your pajamas while searching for life insurance on your time.
If you are looking for Term Life Insurance, shopping online could be a good fit since Term is the most straightforward type of life insurance.
On the flip side, working with an Insurance Agent gives you the opportunity to ask questions and converse with a person.
By all means, take advantage of the internet before and after your conversation with an Agent. Do your due diligence.
The other factor is how complicated is your situation. By complicated, that could mean:
- You have a sizable estate and concerns over estate taxes
- Business objectives
- You are looking for/need other tax shelter investments
Whole/Permanent Life Insurance is a bit more complex. In most cases, you will gain more from a conversation with someone than soley going it alone.
Independent Insurance Agent versus Captive Agent
What is the difference between an Independent Insurance Agent versus a Captive Insurance Agent?
Independent Agents, also known as Brokers, represent several different insurance companies. They don’t work specifically for any single company. Independents have the ability to shop for your insurance needs with multiple companies. Providing you with options.
In contrast, Captive Insurance Agents only represent one insurance company. Sometimes they are employees of said company.
If you have questions while shopping for the right policy who do you contact (and how do you contact them)?
Who do you contact once your policy is in force if you have a billing question, need to make a change to your Beneficiaries, or update your address?
If you buy online, can you call someone at the website you bought it from or do you have to contact the insurance company providing the life insurance?
These questions apply whether you are buying life insurance online or from an Insurance Agent.
What do you expect?
Compare and contrast what you’re being offered. Do the quotes meet your needs?
Does one quote offer Riders (i.e. enhancements that can be added to your policy) where another quote may not have any extras added to it?
Are the insurance companies in your consideration financially sound? For instance, AM Best is one of five independent agencies that assess the financial strength of insurance companies. Your objective is to partner with an insurance company that is financially sound and has a proven history.
Yes, it is true, Insurance Agents do make commissions. Commissions is not a bad word.
Insurance Agents make most of their commissions from life insurance when you initially purchase your policy. Then they may receive a smaller residual commission each year your policy is in force.
You may also find on occasion an Insurance Agent that receives a fee for service.
Keep in mind, you pay Premiums for claims. Commissions are paid for the service you receive.
Don’t worry, you won’t have to pay the Insurance Agent. The insurance company will do that.
No one wants to be pressured into buying something. If you feel like an Insurance Agent is squeezing you to make a purchase or sell you on something you don’t want, move on. Not all Insurance Agents are in the game of high pressure sales.
With that being said, don’t mistaken an Agent that follows up with you from time-to-time as pushy. Their is a fine line, no doubt.
We all want an Aaron Rodgers or Tom Brady at the helm. Someone we can trust to guide us in the right direction.
You’re going to have tough decisions to make in the future. Taking care of your life insurance now (versus later) will be one less thing you have to worry about. Choosing the right life insurance agent can make the process smoother.
By working with an Insurance Agent; specifically an Independent Insurance Agent, you are giving your family the advantage in your financial journey.