This life insurance article is not to explain the different life insurance products which are available in the market place, but rather, its purpose is to explain the importance of finding an honest, professional life insurance agent you can trust.
After 33 years in the insurance industry, I have met life insurance agents with the very highest of ethics. I would trust these people with my grandson’s life, a life that means more to me than my own. These wonderful individuals are not necessarily the elite money makers of the insurance industry, each is simply the type of person who lives by the “Golden Rule”.
When speaking to someone younger, these professional agents speak, as if, they were speaking to their own child. The client’s interest is more important than how much money will be made from the sale. Often, these professionals could have retired years ago. They choose, however, to continue to help others work their way through a product that by its very nature forces people to think about a subject which no one really wants to discuss.
These are the insurance agents that will not simply sell you a life insurance policy because you need life insurance, but rather, these individuals will discuss all of your needs. They will suggest you purchase a term insurance policy and disability insurance, rather than suggesting you just buy whole life and never mention disability coverage.
On the other hand, I have met the scum of the earth. While they are few and far between, here are some examples of the way the unscrupulous agent will speak.
When being trained to sell an “accident only” income policy, I learned some agents would use the following technique.
Question: “Will this policy pay me an income if I am sick or hurt?”
Agent’s Reply: “Yes. This policy covers you for any accident 24 hours a day!”
I am certain you caught the lie. Most people stopped listening after the word “yes” which, of course, is a lie.
Another example of the unscrupulous agent is the person selling “mortgage insurance” which when asked “Is this life insurance?” replies “No”. They state that mortgage insurance is for the mortgage only. This out and out lie is used by an agent simply looking for a quick sale. They are not willing to work with a client over the course of a few meetings. I was told by my boss to use this technique after not making a sale at 3 consecutive appointments. I, of course, quit that day.
At your first meeting, interview the insurance agent while the insurance agent interviews you. A professional will ask specific questions to learn about your needs and desires in life. Then, after the first meeting, if you request the agent return with some proposals for your consideration, he / she will do so. If you are not comfortable with the agent, simply state your concerns. Do not waste the agent’s time as he is not paid a salary. Your honesty will be appreciated.
The last example I offer regards a widow which I recently met. This woman purchased a “Variable Universal Life insurance Policy”. This sophisticated product requires the agent hold an additional license just to be able to sell it. The product was purchased at her bank.
The woman’s understanding of the policy was that upon making a 1 time premium deposit, she would always have life insurance no matter what happened to the cash value of the life insurance policy. The cash value could be placed into any of the sophisticated vehicles offered to her by the insurance company. A high risk mutual fund is an example of where she could place her money.
Now, this may not be the work of an unscrupulous agent. It may simply have been a costly misunderstanding. The truth about these policies is that if there is not enough cash value within the policy to pay for the cost of insurance, the insurance ceases! If you invest $100,000 into this type of product and the cash value is now $20,000 and the cost of insurance is $5000 a year because you are age 75, your insurance will not continue unless you die before the cash value is gone, pay additional premiums or enjoy a drastic change in the investments.
In summation, work only with professionals, ask for references, and do not sign the application until you have no doubt you are making the right choice because all of your questions have been answered.