What You Should Know About Life Insurance:
Choosing a Life Insurance Agent

Collect the names of several agents through recommendations from friends, family and other sources.

Checklist of Info To Get From a Potential Agent

Is the Agent Licensed?

All states require agents to be licensed to sell life insurance. Agents who sell variable life products must be registered with the National Association of Securities Dealers (NASD) and have additional state licenses.

What Company or Companies Does the Agent Represent?

Some agents sell life insurance from only one company while other agents represent a number of companies.

Does the Agent Have Any Professional Designations?

Professional designations include Chartered Life Underwriter (CLU) and Life Underwriter Training Council Fellow (LUTCF). Agents who are also financial planners may have designations such as Chartered Financial Consultant (ChFC), Certified Financial Planner (CFP) or Member of The Registry of Financial Planning Practitioners.

Is the Agent a Member of a Professional Association?

The National Association of Life Underwriters (NALU) is the the major association for life insurance agents. NALU’s local associations hold educational seminars for agents. Financial planners get similar training and services through the American Society of CLU & ChFc, the Institute of Certified Financial Planners (ICFP) and the International Association for Financial Planning (IAFP).

 

What an Agent Can Do for You

An agent should be willing and able to explain various policies and other insurance-related matters. The agent should take his or her time and talk in terms that you understand. The agent should be happy to answer all your questions.

You should feel satisfied that the agent is listening to you in all aspects of the insurance buying experience. You should feel that the agent is looking for ways to get you the right type and amount of insurance at an affordable price.

If you are not comfortable with the agent, or you aren’t convinced he or she is providing the service you want, find another agent.

If you feel pressured in any way, you should find another agent.

Meeting With the Agent

The agent will meet with you to discuss your life insurance needs. He or she will ask questions about family income and your net worth. Using the information you already have assembled about your financial situation, you should be prepared to discuss your insurance options.

Will the agent ask questions about my health?

In an initial meeting, be prepared to answer questions about your health (for example, age, medical condition, medical history, family history, personal habits). It is important that you answer these questions carefully and truthfully.

Health information is part of setting the premium for your coverage. For example, you may pay a lower premium if you do not smoke. On the other hand, if you have a chronic illness, you may be charged a higher premium.

In the event of a claim, accurate and truthful answers enable your beneficiary to receive prompt payment. Inaccurate or untruthful answers may cause delay or even denial of a claim.

When you apply for life insurance, you may be asked to have a medical exam with a licensed medical professional.