How to Choose the Right Life Insurance Professional
The decision to buy life insurance is one of the most important a person can make in their financial lives, and buying a life insurance policy can be one of the more difficult things a person does. Why? Because life insurance is a complex financial instrument full of many different moving parts that people need to be able to understand. The more perplexing aspect of the life insurance purchase is the fact that there are literally hundreds of different companies, and thousands of different products from which to choose. It’s no wonder that people tend to procrastinate when it comes to buying life insurance.
Solid guidance from a well qualified life insurance professional can ease the process of buying a policy and instill the peace-of-mind that the right plan is in place. A life insurance purchase is a long term commitment, and because the financial security of your family is at stake, it is vitally important to know that you have the right type of product, the right amount of coverage and that you know exactly how your plan will work for you.
Keys to Choosing a Life Insurance Professional
First Know Thyself
The more you understand your complete financial situation: your concerns, your needs, your priorities, your tax status, your preferences and risk tolerance; the better positioned you will be to identify the right life insurance professional. With the availability of online tools to do your own financial assessments, you should have a fairly clear idea of what your needs are.
Do Your Homework
Life insurance is one product that you shouldn’t go searching for blindly without at least some basic knowledge of how it works and the types of products that are available. With the information available online, you could become well versed in life insurance in just a couple of hours. Before you speak with a life insurance professional, you should know the difference between term life, whole life, universal life and variable life. You should know how cash values work and how the death benefit is paid. The more knowledge you have the more control you will have in the process.
When choosing any type of professional, referrals are often the best way to find the ones with whom you would like to work. Referrals can help you quickly narrow down your choices, and they almost always are provided by satisfied consumers who happen to be a friend, relative or colleague whom you trust. Don’t just settle for a name. Ask your referrer what it is about the person that he or she finds so exceptional, and also ask about any negatives. Try to obtain at least three referrals so you can apply your own criteria.
Find out who they Work For
There are essentially two types of insurance professionals: A life insurance agent who represents a life insurance company; and an insurance broker who represents his or her client to a number of different insurance companies. While all life insurance professionals get paid essentially the same way, by commissions (with most products the life insurance company pays the commissions), the way they work is based in some part on their relationship with the life insurer. There are many well qualified life insurance agents who offer very professional services; however, they tend to sell only those products offered by their life insurance company. Insurance brokers are licenses with several insurance companies and can, therefore, go further to match the client’s needs and preferences with the most suitable product.