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I understand that most people go and stay where they are the most comfortable. That’s why so many people end up buying overpriced life insurance through their auto and homeowner’s agent, agents that are captive to companies like Farmers, State Farm, Farm Bureau and Allstate.

An independent agent can offer two things that will set them apart in the life insurance arena to such a distance that you will wonder where the auto and homeowners guys get off even claiming they sell life insurance.

First, and I have documented this in previous posts, the rates available through life insurance companies can be as little as half of the premium you would pay for comparable coverage through one of the Farm companies. The agents don’t have a choice. That is their product and I honestly believe that most of them don’t know any better and believe that their rates are just fine. After all, if they weren’t just fine, why would people be buying them. A case I mentioned just recently with Farm Bureau was on a young couple that was paying $51 a month for both of them for $100,000 of 10 year term on each.

This couple has two very young children and to start with, 10 year term insurance isn’t the right product. They needed at least a 20 year term to make sure things are covered until those kids grow up. We were able to get them $250,000 of 20 year term each and they are paying $33 a month total. So, numero uno, independent agents have the best prices available to them.

Second is underwriting. The folks underwriting life insurance at auto and homeowners companies are very likely told not to accept any risk, perceived or real. So even the smallest of issues is blown into an underwriting nightmare. I worked with a woman over the weekend that was told by her State Farm agent that at her age and her health, she should probably just forget about getting life insurance. She is 66 and the only health issue is borderline high blood pressure. She is well on the way to getting the coverage that she really needs at a very good price.

Bottom line. It is the independence that makes the difference. If your agent hasn’t got a choice of companies and and variation of underwriting guidelines, they are stuck hoping you don’t notice just how bad their products are. Shop around.