1. “Are you a full time agent?”
Due to agent commissions being reduced and expenses rising, it is becoming increasingly more difficult for agents to maintain a business office and overhead expenses. Some agents are forced to operate out of their “spare bedroom” and work a second job to make ends meet. You wouldn’t want to go to a part-time doctor so why would you use a part-time agent? Make sure the agent you are speaking with is stable and not “desperate” to make a sale. You deserve a competent, well-established agent.
2. “Do you have errors and omission insurance?”
Reputable insurance agents carry errors and omissions insurance that will help protect themselves and the client in the event of a wrongful act or misrepresentation by the agent. You should make sure they have a policy with a face amount of at least $500K.
3. “What area of life insurance is your specialty?”
There are many products an insurance agent can offer other than standard life insurance. These products include disability income protection, long term care insurance, Annuities or Retirement vehicles. Make sure the agent you are speaking with fully understands the products you’re after and how they relate to your needs.
4. “How accessible are you?”
The Internet has made shopping for many types of products as easy as clicking a mouse. Life insurance is no exception; there are many life insurance companies that assume you will go to their Web site, click the policy you want and pay. There are consumers who prefer to do business this way. But if you are a not one of them, make sure you select a life agent who shares your views on the importance of personal attention.
5. “How often will we talk?”
Many policyholders believe that buying a life insurance policy is a once-and-done deal. The reality is that your life insurance needs change as your life changes; getting married, having a new baby, earning a big promotion or buying a big home can require changes in your policy. You will not always remember to call your agent every time there is a significant change in your life. An agent who will periodically assist in evaluating your needs could be a blessing, especially if he or she initiates the contact.
6. “What companies do you represent?”
Asking this question is important for several reasons. First, an agent who has access to several different insurance companies will be able to shop for you – more choices means more opportunities for better terms, premiums, etc. In addition, knowing what companies your agent will go to for coverage can help you determine the financial strength and integrity of the company before the policy is offered. There are several insurance company rating services available to research this information as well as your state’s insurance department. And, by all means, question any agent who suggests placing your business with a financially unstable insurance company. Lastly, a greater selection of products may give your agent the tools he or she needs to always act in your best interest, even as your needs change over time.
7. “What other services do you provide?”
This question can really go either way. You either are looking for a specialist that works closely with the life insurance product you are shopping for, or you want one person who can handle your laundry list of needs. Personally I tend to think that it’s better to go with an independent agent who is a specialist in a particular field. This way the agent is not held to one company and but they work with specific products that they know inside and out.
8. “Is my policy convertible? Up to what age?”
Know whether your policy is convertible and for how long. Your policy likely has a conversion clause. That’s the line on your agreement that discusses how you may exchange your renewable term policy for another type of policy without evidence of insurability. You want to find out how for how many years your policy is convertible. And if your policy is convertible, you want to make sure you know and understand the rules.
9. “How do I make a claim if I need to?”
Finally, know what you need to do to make a claim on the policy. Make sure it’s clearly written on your policy whom you contact and under what time guidelines you’re required to act. Also, become aware of what options the insurance company has when you make a claim. Learn how long the company has to respond to your claim.
10. “Why do you feel this product is in my best interests?”
This question will quickly drive out whether or not your agent was listening to your needs in the first place. The simple answer to this question should first state what you asked for and then address how this policy fulfills those needs.
