Life insurance premiums are set uniformly by insurers. If two insurance agents quote policies from QRS National Life, the costs should be almost identical. As a consumer, since you will pay roughly the same, regardless of the agent working with you, choose someone with a high degree of professional achievement. Professional achievement is the #1 indicator in choosing an insurance agent with the expertise you need. This will help you get the most for your money. It doesn’t cost you much more to get an accomplished, experienced agent, compared to a newbie.
Codes of Conduct and Ethics
Consumers should look for an agent who works on your behalf while representing the insurer. The agent is supposed to serve the best interests of both. Professional standards give them the perspective that makes it easier for them to walk that tightrope. Professional codes of conduct and ethics generally go with membership in a professional insurance group or association. Consumers can look for agents who are an integral part of their professional peers.
For life insurance agents, the Chartered Life Underwriter (CLU) and Chartered Financial Consultant (ChFC) designations are generally considered the top credentials. Both are administered by The American College, with the ChFC being the financial-services add-on to the insurance-oriented CLU mark. Agents who have one or both of these credentials agree to abide by the college’s code of ethics and conduct.
Expectation of Outcome
One of the key decisions you make in buying life insurance and in choosing the right agent to sell you coverage is determining what you really want insurance to achieve.
Your basic need is replacing lost income and protecting your loved ones from a future without you. That means a basic term insurance policy where you buy coverage for a set period of time can work very well. When you are a young married parent, the coverage protects against catastrophe, but it lapses when you get older. When you are a senior, typically your life’s savings and any pensions protect your family.
Many consumers, however, want to have their insurance premium dollar generate a long-term investment return. Cash-value life insurance policies are more expensive. They tend to generate bigger commissions for the agents, so it’s cheaper to “buy term and invest the difference,” provided you have the discipline to actually capture and invest the savings. Policies that build investment value can be a type of forced savings, by comparison. Some use insurance this way, saying it might not always feel like scrimping and saving to make investments, but that it always paid the bills on time. “Insurance is like a bill for savings.”
There are plenty of arguments in the industry as to which is the best policy and for whom. There’s also no one right answer. That’s why you will want an agent to explain all of the potential options to you so that you can figure out the coverage, cash-flow, and investment options which work best for you. Remember, many policies can be converted, so that the term coverage you buy at age 30 to protect you while the kids are young may be convertible later in life into a whole or variable life policy before the term ends at age 55. That’s a big reason why you want an insurance agent who will work with you over a lifetime.