The thought of a life insurance agent, for many, conjures up a picture of someone showing up at the house and sitting in the living room with you and very often using a flip chart type of graphic to drive home the point about why you need exactly what he came there to sell.
Ahh, the home town agent! It holds a special place in my heart since that is exactly how I started in the business back in 1978. At the time I worked for Mutual of Omaha and believed that the company and what they had to offer was certainly as good as it got. I really didn’t know any better. Being a captive agent the company kind of inundates you with propaganda about themselves.
Fast forward nearly 30 years and life insurance can actually be had without ever talking to anyone. Just go on line, fill in some information and give a credit card and within a week or so a policy shows up. You paid too much for it, but boy was it easy.
You can also try some of the life insurance mega stores on line. Selectquote, Accuquote, Intelliquote, etc. They offer quick quotes and quick talking sales people who will run you through the process so fast that you will actually believe you have found the easy button for life insurance. They will also lead you to believe that by coming to the mega store you have found the best price. What they won’t tell you, and actually a lot of people see this as a plus, is that they will stay in touch and offer service for the life of the policy. The names of the megastores kind of sums up what they do. They quote! Then they are trained to close the sale quickly. Then they are never heard from again.
So why would you give up all of that convenience to work through an independent life insurance agent? Well, the good news is that we are just as convenient as the big boys. Your home no longer needs to be the sales office in order to shop for and purchase life insurance. It can all be done on the internet and the phone. We are just as quick as the mega stores in generating quotes. It’s all done by computer so there is no advantage. By law you won’t get a lower price by going with a bigger agency. The playing field is level. We all have the same rates.
What you won’t get, in general, from an independent agent, is an attempt to close a sale quickly. We work for ourselves and don’t have a quota of closes that are expected each day so, at least around my office, we provide information and give you all the assistance you need, and then wait for you to ask to buy. It’s your decision so you are actually left in charge of it.
A real advantage to an independent agent is if you have health problems. Whether it is cancer, diabetes or heart disease, often these cases need to be shopped to find the best rates. An independent agent, in my experience, and the experience of many of my clients, digs a little deeper, beats a little harder, and usually comes back with the best offer.
The frosting on the cake is that an independent agent will offer service. Why, you ask, do you need service?
If you’ve purchased term insurance, there is a point at which the price will go up. It is generally far enough down the road that most people forget about that point and are caught off guard when they get a bill for an amount, say, 10 times more than previous year. A good agent will make sure you have seen all of your options before that.
What if you have a term policy and during that term of insurance you have a dramatic down turn in your health? With no one to provide advice you might just hang on to that term policy until it is unaffordable and then drop it because with your health, a new policy just isn’t budgetable. A good agent who stays in touch will know that you’ve had a health change and can provide advice on conversion or purchasing a new term before all of the options are unaffordable.
With an agent staying in touch on at least an annual basis, you may find that your cost of life insurance goes down over the years. I’ve had many clients that, for instance, were initially paying a higher cost because their cholesterol was high or their blood pressure was high on the exam. A year or two later, with those issues under control, lower rates were available which allowed them to lower their cost, increase their coverage of lengthen their term.
Last, and I believe most importantly, is that there is that chance that you will actually use your life insurance. If your beneficiary contacted a mega store for assistance in that situation, they would be given the customer service number at the insurance company. That won’t necessarily produce a bad experience, but it will be rather impersonal. Let me just suggest that years of experience helping widows and children through this event has solidified my belief that the best possible thing they could have on their side is an agent who cares about why they sold you life insurance in the first place. You want an advocate for your beneficiary.
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.