FBI agents . . . secret agents . . . life insurance agents. Okay, insurance agents might not be up there in the world of international espionage. Does James Bond have life insurance? If he does, you can bet he got an insurance expert to find the best deal for him!
In the complex world of life insurance, having someone on your side who knows the industry is always a good thing. Hey, even Dave Ramsey has one! An agent is in the best position to find you the ideal life insurance policy for youâwhatever your situation. ěš´ě§ë ¸ěŹě´í¸
So how do you find a good agentâone whoâll save you time and money?
Letâs take a look . . .
What Is a Life Insurance Agent?
Life insurance agents are licensed professionals who sell life insurance. They will work for an insurance company and sell policies âcarriedâ by that insurance company, or can work more independently and are able to sell life insurance from a range of companies.
When you contact a life insurance agent, they will ask you for details about your life and what youâre after when it comes to insuring it.
What Does a Life Insurance Agent Do?
A life insurance agentâs job is to sell life insurance policies. If you call an insurance company looking for a quote, youâll speak to an agent. This is what theyâll do:
Get your personal details. This includes your age, if youâre married, have any dependents, your occupation, and income.
Look at your financial situation. This includes finding out what your big expenses are (like a mortgage) and if you have savings, investments and assets.
Put together personalized advice for you. They should write up a summary of your call, along with their advice on the sort of life insurance that could work for you. This document is yours to take away and consider before you make any decisions.
Follow up. If you do buy a life insurance policy through them, theyâll get in touch with you every few years to see if your insurance is still working well for you and your financial journey. ěě íěš´ě§ë ¸ěŹě´í¸
How Do Life Insurance Agents Get Paid?
Insurance agents make their money through commissions from a percentage of the premium itself. Donât worryâyouâre not hit with a bill immediately after youâve bought a policy! The insurance company youâre buying your insurance from will pay them the commission.
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The more life insurance policies an agent sells, the more theyâll make in commissions. Independent agents are usually only paid from commissions. But a “captive” agent might get a regular salary from the company they work for, and less in commissions. And their salary might be a little lower if things like marketing and administrative costs are handled by their employer.
Each state regulates its insurance prices. This means insurance companies file their âprice listâ of all the policies they sell with the stateâs insurance department. This regulation means an agent selling you an insurance policy canât quote a higher price than if youâd just gone directly to the company itself.
Thatâs why itâs smart to get a range of quotes from an agent. You can see theyâre not just pitching you the priciest options when it comes to your insurance coverage but are genuinely looking to get you the best deal for you.
Captive vs. Independent Insurance Agents: Whatâs the Difference?
Insurance agents fall into two types â captive or independent. The difference between the two is how far they can reach into the life insurance marketplace.
Captive insurance agents are only able to sell insurance on behalf of the company they work for. They have good knowledge of the policies offered but are limited because of being captive to that company alone.
But independent agents (also known as ânoncaptiveâ agents) work independently to scout policies across more than one insurance provider. That means noncaptive agents can find and sell insurance from a much bigger pool of life insurance providers. Which is good for you because they can save you money on your premium (which is the amount you pay monthly or annually for your life insurance.)
How To Choose a Life Insurance Agent
So, youâve made the call and are speaking to an agent. Take a seat and have this handy list beside you to see if theyâre worth it from the get-go.
They understand your situation and the financial journey youâre on. Are they listening well about who you are and what you need coverage for?
They know what you donât need. Make sure theyâre not trying to oversell things to you.
Theyâre answering your questions (even the small ones). Life insurance is complicated enough without them dodging your questionsâno matter how trivial they seem.
Theyâll write up a summary and give you time to decide. If theyâre pushing you to make a decision on that first call, itâs too soon!
Theyâre licensed to sell insurance in your state. They shouldnât withhold this info, along with how much commission theyâre paid, either.
Theyâre qualified (but donât go on about it too much). The designations and letters after their name could be one of the following, but donât let it give you a false sense of security as to how qualified they are:
CLU â Chartered Life Underwriter ěš´ě§ë ¸ěŹě´í¸ ěśě˛
ChFC â Chartered Financial Consultant
CFP â Chartered Financial Planner
RR or RP â Registered Representative or Registered Principal
CIC â Certified Insurance Counselor
The bottom line isâdonât get too hung up on these letters. You can be prepared by knowing what they mean, but if theyâre still trying to sell you a bunch of stuff you donât need (or are just a bad listener), theyâre not doing their job!
Do I Need a Life Insurance Agent?
Itâs always a good idea to use an expert when it comes to buying life insurance. You could even do some homework beforehand using our coverage checkup tool to see what sort of life insurance you need. Itâs quick and easy to use and gives you something to work with when youâre speaking to an agent.
Dave always recommends going with independent insurance agents. They can shop around a larger marketplace to get the best option for you, saving you time and money.
Our trusted friends at Zander Insurance have been helping people just like you get the best life insurance plan for decades. Get in touch with them today and know youâre in safe, trusted hands with insurance experts ready to listen.