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How should I choose a life insurance agent?
When you’re
considering buying life insurance, it’s important to choose an agent or
broker who can help you. Buying life insurance can be complicated or
confusing. The key to buying the right amount and the right type of
policy at a good rate is a good agent or broker. You should choose one
who:
- Understands your financial
situation, including your attitudes about risk, your income and estate
tax “brackets,” and your other financial assets and obligations, as
well as your personal situation (that is, your age, marital status,
dependents, etc.)
- Explains, in terms you can easily
understand, issues, options and planned use of life insurance in your
financial program
- Provides you with a personalized
written document that
-records the facts of your current financial and personal situation and
-describes the features of the life insurance and how it fits into your
situation
- Doesn’t pressure you into a
decision, but works with you until you’re ready and convinced that you
are doing what is best for you
- Is prepared to review with you
periodically—perhaps every three years or so—whether the product
continues to be suitable for your needs and circumstances
- Is licensed by your state insurance
department.
If you don’t have an agent or broker who fits this description, ask
your lawyer, accountant, friends, relatives and business associates for
the names of insurance agents or brokers with an excellent reputation.
You can also use this link: http://www.life-line.org/find_agent.html
to connect with the nearly 70,000 members of the National Association
of Insurance and Financial Advisors (NAIFA), who subscribe to the
organization’s Code of Ethics ( http://www.naifa.org/about/ethics.cfm
).
An agent or broker who has one or more professional financial services
designations has demonstrated a commitment to specialized education in
the field.
The
Compensation Issue
Like everyone else, agents and brokers get paid for
their services, which are enriched by their education and experience.
Most agents and brokers are paid by commission, but some work on a fee
basis. Typically, the largest part of the compensation is paid at the
time you purchase the annuity, since most of the agent’s or broker’s
work occurs at that time or just before it. As with any professional
service, you should understand how your agent or broker will be
compensated and how that might affect the purchase recommendation.
The bottom line? The best way to protect yourself is to make sure you
understand what you’re buying and the nature of the product’s
limitations, penalties or fees if you want to drop the policy.
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