10 Questions to Ask Your Term Life Insurance Agent
The following is a list of the top ten questions you should ask your term life insurance agent or term life insurance company before you give your business to anyone. You should be prepared to ask a number of questions before signing on any dotted lines. Below, is a pretty solid list of ten important questions to ask.
1 – Are you currently licensed in my state to sell life insurance? If so, how long have you been licensed?
Every state requires that insurance agents be licensed in every state that they sell insurance and securities in. In addition, the agent must be appointed by the insurance company or investment firm to sell products for them.
2 – Are you and your business both located within the United States?
Most states actually require that the insurance agent reside within the United States and that they have a business address that is located within the United States we well. Make sure to verify the business address of your prospective agent, as this will also indicate whether or not your agent maintains a full time business as well as where they practice their business.
3 – Are you a full time or a part time agent?
Because agent commissions are being drastically reduced and expenses are continuing to rise, it has become more difficult for insurance agents to maintain business offices in addition to overhead expenses. As a result, many insurance agents are forced to operate out of their homes, and to work a second job in addition to their insurance work. Unfortunately for them, this spoils their credibility to a degree, as you should strive to work with full time insurance agents rather than those who appear desperate to make a sale.
4 – Have you ever been convicted of a felony or a misdemeanor? (you can’t hold an insurance license.)
This one should be obvious. You have to answer this question on your insurance application, so make sure to find out the same information about your insurance agent or term life insurance company. You have a right to know just as they do.
5 – How many companies are you already representing and who are they?
Captive agents only represent a single company and only sell products offered by that company. Independent agents may represent more than one company, offering a larger variety of different products. Term life insurance needs tend to differ greatly from person to person, and everyone has different product and budget requirements.
6 – Will you provide information for the insurance companies that you recommend?
Every insurance company has financial ratings that are given to them by various different rating companies, including Moody’s, Standard and Poor’s, and A.M. Best. These ratings are based upon the financial stability, diversification of funds, claims paid, performance and other factors for each insurance company. These ratings tend to be updated fairly regularly so make sure that you are getting the most recent ratings.
7 – What professional designations do you have?
The term life insurance industry requires that agents complete continuing education courses in order to keep their insurance license active and some insurance agents even go beyond what is expected of them. Find out what courses your insurance agent has taken.
8 – Do you have insurance for errors and omissions?
Reputable term life insurance agents carry insurance for errors and omission that will protect them in the event of a wrongful act or a misrepresentation by said agent.
9 – Are you yourself covered by life insurance?
Make sure your insurance agent is practicing what he or she preaches. Do not buy insurance from someone who has not already purchased coverage for him or herself.
10 – What life insurance area is your specific specialty?
There are many different products that can be offered by an insurance agent in addition to standard life insurance, including long term care insurance, term life insurance, fixed annuities and disability income protection. Make sure that the agent you are working with understands these products and how they may or may not relate to your individual needs.