Avoid These Life Insurance Agents
Finding the right life insurance agent is essential in ensuring that you get the product that best fits your needs. Every industry has its bad apples and the life insurance industry is no different. If you are trying to find the right agent, there are certain things that you can look out for that might raise a red flag. We have listed 10 things that you should look out for when working with an agent. If you are talking to an agent that is guilty of even a few of these things, it is probably best to avoid them or get a second opinion.
They Don’t Shop Around: We always emphasize the importance of using an independent agent that can shop multiple companies. It is not to say that a captive agent is not good at their job, but shopping your policy could save you thousands over the life of your policy. Products, underwriting guidelines and premiums differ from company to company. A good independent agent will be able to shop your case to multiple insurers to find you the best fit especially if you have any health issues.
They Only Promote One Type of Coverage: Some agents believe that only one type of life insurance product is best for everyone whether it is term life insurance or permanent life insurance. Proponents of term insurance will say that you should always “buy term and invest the difference”. Proponents of whole life insurance will say “why rent when you can buy?”. If you are dealing with an agent that is only interested in showing you one product and nothing else, you better get a second opinion. The product you purchase should always be based on your specific coverage needs and goals.
They Don’t Complete a Thorough Needs Analysis: Simply taking a multiple of your income is not enough. In order to give you a thorough needs analysis, a good agent will thoroughly interview you about your detailed goals for providing for your family if you were to pass away.
They Quote You the Wrong Health Rating: Some agents will quote you at the best health rating just to show you the lowest price. This happens because they are either eager to get you to fill out an application or they simply don’t ask you the right health and lifestyle questions. Make sure that your agent doesn’t just ask the simple health questions like height and weight, but that they do a thorough assessment of your personal health, family history and any dangerous hobbies that you might have so that they can give you a realistic quote up front.
They Overinflate the Returns on a Permanent Product: Permanent policies build cash value that grows on a tax deferred basis. If you are interested in buying a permanent product like universal life, your agent is obligated to show you an illustration. The illustration simply represents hypothetical scenarios for above average, average and below average returns on your cash value and possible changes in policy costs. This will give you an idea of how well your policy will do in under different conditions. The agent can usually choose the percentage for the best case scenario when creating a hypothetical illustration within the insurance company’s suggested guidelines. There’s a saying in the insurance business that the only thing illustrations prove is that “ink sticks to paper”. Simply put, if your agent is showing you an illustration that shows double digit average returns, chances are it will never live up to those expectations. Make sure that your agent shows you realistic best case scenario returns.
They Load You up with Unnecessary Riders: You can add many different riders to life insurance policies nowadays. Some may be worth it to you but others might be a waste of money. If you have an agent that wants you to add every rider available to your policy, make sure that you understand how each works, the cost and if you really need it.
They Sell You a Policy and Disappear: It’s difficult to know how your agent will serve you after the sale is complete. Life insurance, especially permanent insurance, is not a “set it and forget it” product. A good agent will monitor your policy and your personal insurance needs throughout your lifetime. You want an agent that will continue to monitor your needs and stay connected to you well after the sale. If they don’t tell you how they plan on servicing you after the sale, just ask.
They Don’t Thoroughly Explain the Product: Some insurance products have many moving parts. Don’t buy a product unless your agent has thoroughly explained exactly how it works. If they are not sure about something, make sure that they find out. You don’t want any surprises down the road.
They Encourage You to “Leave Out” Facts on Your Application: This is a serious violation and we would like to believe that no agent would do this. Being truthful on your application is very important. If you have an agent encouraging you to tell a little white lie on your application to get a lower rate or avoid prolonging the underwriting process, they are not the agent for you. Insurance companies are very good at finding out the truth and if they find out you lied on your application, they could dispute your death benefit if you pass away.
They Won’t Show You References: If you are still on the fence about whether or not to use an agent, ask for references. They should be willing to show you letters of recommendation or allow you to talk to a couple of current clients.
These are some of the things that you should look out for when shopping for the right agent. If you are discussing coverage with a potential agent and you don’t feel comfortable working with them, simply get other opinions until you find an agent that you feel comfortable using. We would be happy to shop your policy and show you what we can do for you. Please feel free to give us a call at (888)687-9444 or email us at info@archstoneagency.com if you have any questions.
Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients. We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage. Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com. You can also visit our website at www.archstoneinsurance.com.
