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Do I Need A Life Insurance Agent?
Article 9 of 9 in Getting the Right Life Insurance Policy
Buying life insurance online without the use of a life insurance agent, can be quick and easy. You can find some good deals on life insurance through the internet. If you're going to buy insurance without an agent, you'll need to invest time and effort in order to learn about the various types of insurance and make sure that you know what your insurance needs are. This research can be time consuming and still leave you with questions. A life insurance agent can be a valuable resource to help you understand life insurance and help you purchase a plan that fits your needs.
Benefits of a Life Insurance Agent
There are some important benefits to having a life insurance agent. A good agent can help you:
- Find coverage: A life insurance agent will be able to find insurance that is difficult to find on the internet. If you have health concerns or present a risk to insurance companies that makes it difficult for you to find a policy, then a life insurance agent or broker will either know of companies who can help you or know how to find them.
- Fill out an application: A life insurance agent can also help you complete the application process and explain any coverage or policy riders that could be available that would help your individual situation. Issues such as medical questions, incontestable periods, a non-forfeiture options can be difficult to comprehend when you fill out an application, and if any question is answered incorrectly, the insurance company could refuse to pay your benefits when you die. An agent can help make sure your answers are correct and that nothing on your application jeopardizes your coverage.
- Understand your policy options: There are a variety of life insurance options for you to compare. You need to decide between term life, and the various levels of permanent life including whole life, universal life, and variable life. The different types of policies can be confusing, but an agent can look at your needs and financial goals and help you find the best coverage.
- Continued support and assistance: As your needs change, your life insurance may have to change as well. An agent can help you re-evaluate your plan and make sure you are always covered.
How a Life Insurance Agent Can Help You Save Money
If you're concerned about saving money, using an insurance agent will not raise the cost of a policy much, if at all. Here are some sound reasons to choose a reputable life insurance agent:
- A good agent can make sure you purchase the right amount of coverage, help you find the best type of policy for your needs, establish the policy owner and beneficiary properly and be an advocate for you if you're having problems with the insurance company later on.
- A good agent can also help you choose a financially sound company, which has recently become a significant part of the decision process.
- If you have health, weight, or other problems that might make it difficult for you to find life insurance, an experienced life insurance agent can help you locate a company that can provide you life insurance.
- An agent knows all ways that you can save money on life insurance and all the discounts that may be available to you.
TIP: If your budget is a significant concern, tell the life insurance agent. They will work to meet your needs when shopping for life insurance. If they do not seem to respect your desire for cheap insurance, then go to another agent!
What to Ask Your Agent
Different insurance companies offer different rates for the same kinds of insurance with the same types of people being covered. A good agent will be able to find you different pricing on the same policy from different insurers. Here are some things to ask your agent:
- How long have sold life insurance? The more seasoned an agent the better he will be able to help you with your need, especially any difficult situations
- Ask what type of life insurance is right for you
- How many life insurance carriers is he appointed with or can shop for you? This will give you an idea of the broad range of quotes you will get and from which companies.
- Tell the agent any problems or difficulties you have in finding coverage and ask if he has found insurance for others with similar problems.
- Once you get a life insurance quote, ask the agent for any other coverages or riders he would suggest for you and your individual situation that could better help you.
- Once he completes a needs analysis for life insurance and determines how much you need, ask how you get what you need for the best price.
How Life Insurance Agents are Paid
The compensation of a life insurance agent varies between companies and the types of insurance. They get a commission for the first year of coverage, which is substantially larger than the commission that they get when a policy is renewed. Life insurance is priced by the insurance company, who in turn pays a commission to your agent.
Life insurance agents are not allowed to share their commissions with you or discount your premiums in order to get you to buy from them. Just about every state has an anti-rebate statute.
These statutes make it illegal for an insurance agent to give a consumer a rebate or part of the agent's commission. The classic rebate is simply a kick-back. The agent sells a policy and then he pays you money.
The law typically prevents anything of value being offered or given as an inducement to buy. That's broad enough to include things like having the agent pay your application fees or first premium or even gifts or services offered to get you to buy the policy. All of these things are treated as if the agent was sharing his premium with you in order to get you to buy from him.
TIP: Be leery of agents that offer such gifts. Ask around and get a referral for a reputable life insurance agent.
Whether or not you use a life insurance agent is up to you, but you should consult one when you are shopping for life insurance to see how they can help you. Life insurance is an important purchase, and you need to shop for multiple quotes and get help from an agent when you need it.
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