How to Choose the Right Life Insurance Professional

Updated: September 29, 2016 by Kara Downing, CFP®

The decision to buy life insurance can be a complicated one. Why? Because life insurance is a complex financial instrument with a lot of moving parts. The more perplexing aspect of the life insurance purchase is the fact that there are, quite literally, hundreds of different companies, and thousands of different products from which to choose. It’s no wonder that people have a tendency to procrastinate when it comes to actually purchasing a policy.

Solid guidance from a well-qualified life insurance professional can ease the process of buying a policy and instill the peace-of-mind that the right plan is in place. A life insurance purchase is a long term commitment, and because the financial security of your family is at stake, it is vitally important to know that you have the right type of product, the right amount of coverage and that you know exactly how your plan will work for you.

Keys to Choosing a Life Insurance Professional

First, Know Thyself

The more you understand your complete financial situation: your concerns, your needs, your priorities, your tax status, your preferences and risk tolerance; the better positioned you will be to identify the right life insurance professional. With the availability of online tools to do your own financial assessments, you should have a fairly clear idea of what your needs are.

Do Your Homework

Life insurance is one product that you shouldn’t go searching for blindly without a basic knowledge of how it works and the types of products that are available. With the information available online, you could become well-versed in life insurance in just a couple of hours. Before you speak with a life insurance professional, you should know the difference between term life, whole life, universal life and variable life. You should know how cash values work and how the death benefit is paid. Being armed with a basic knowledge of insurance will all you more control in the process.

Get Referrals

When choosing any type of professional, referrals are often the best way to find one that works for you. Considering they are almost always provided by satisfied consumers who happen to be a friend, relative or colleague whom you trust, referrals can help you quickly narrow down your choices. But don’t just settle for a name. Be sure to ask what it is about the person that he or she finds so exceptional, and ask about any negatives. Try to obtain at least three referrals so you can apply your own criteria.

Find Out Who They Work For

There are essentially two types of insurance professionals: A life insurance agent who represents a life insurance company; and an insurance broker who represents his or her client to a number of different insurance companies. While all life insurance professionals get paid essentially the same way, by commissions (with most products the life insurance company pays the commissions), the way they work is based in some part on their relationship with the life insurer. There are many well-qualified life insurance agents who offer very professional services; however, they tend to sell only those products offered by their life insurance company. Insurance brokers are licensed with several insurance companies and can, therefore, go further to match the client’s needs and preferences with the most suitable product.

Getting Started

While our firm does not sell commission products like insurance, we can help you determine whether you need insurance, what type of insurance is most appropriate for you based on your specific needs, and connect you with the right insurance professional to assist you. We receive no incentives to provide you with this service. It's just one of the many services we offer to ensure you have the most qualified professionals on your team.