A life insurance agent or financial advisor can be a very valuable tool on the path to financial security and managing your finances. Many people mistakenly believe that a financial advisor will find them the best deal on life insurance, and this is a mistake. A financial advisor is interested in selling you the most expensive policy that he or she can, because they get paid the highest commissions. For this reason it is crucial that you always compare life insurance quotes even if you are already working with an advisor, or if you plan on working with an advisor.
Even though there are many honest financial advisors, there is an inherent conflict of interest when it comes to saving their client’s money. When they save a client money, they cost themselves money by taking a smaller commission in most cases. Most advisors and life insurance agents are interested in earning the highest possible commission from the sale of life insurance because it is not a product that people purchase on a regular basis, so they may not have any additional revenues from you in the future. When an agent is concerned about his commission it almost always ends up costing the client far more money.
Many Agents Can Only Work With One Company
Even if an agent wants to act in a client’s interest and save them money, they are often limited in which companies they are allowed to sell to their clients by the company that they work for. Most life insurance agents are only allowed to sell insurance from the company that employs them. This prevents them from getting their clients the best deal. This is why it may be smart to compare life insurance quotes before speaking with an agent, so you can get a feel for the company that can provide life insurance for you at the lowest cost.
Prices can differ widely among different companies. Even when you compare the same length of term insurance, for the same amount of coverage, different companies can have vastly different prices. This is why it can cost you so much money if you work with an agent who is unable or unwilling to compare quotes from different companies.
Agents Are Paid Much More Money For Selling You Whole Life
Before you work with a financial advisor you may know exactly what coverage best suits you. For most people, this will be a level term insurance policy which expires when they no longer need the coverage, often around retirement. Sometimes you will be advised against this when you speak to a financial advisor. While there are good reasons that someone should own whole life insurance or another form of permanent life insurance, the reality is permanent forms of life insurance are sold to far too many clients. This is in large part due to the fact that agents and financial advisors make far bigger commissions for selling whole life insurance than they do from selling term life insurance.
The agenda to sell permanent forms of life insurance to people ends up costing their clients a lot of money that they could otherwise be saving in a retirement account or invest in home equity, which can earn money far faster than in a life insurance policy. You should compare quotes because you should understand how much less expensive term life insurance is than permanent forms of insurance, for the same amount of coverage.
You Can Still Work With An Advisor
If you have an agent or advisor that you trust, you can still work with them and save money. Some may agree to advise you for a flat fee, which can compensate them while you save on your insurance coverage. Some agents also have the ability to get appointed with other life insurance companies through their own companies licensing office. If you work with an advisor, but find a much better deal on life insurance from another company, discuss the possibility of him or her getting appointed with the less expensive company so that they are able to make a commission for the guidance that they have provided to you.
Comparing quotes before, and during the process of working with an agent can be extremely valuable to you. Comparing quotes before gives you reasonable expectations as to the price that the insurance costs, and comparing rates after hearing a proposal from an agent allows you to shop around for the exact same coverage to see if you can find it significantly cheaper. Life Ant believes that comparing quotes online should become an integral part of the life insurance buying process, and this is why we always encourage our clients to look at rates from multiple companies.
Keep In Mind Other Factors Than Price
When it comes to life insurance, perhaps the most important factor is that the coverage is there, and readily available when you need it. Before you buy the least expensive policy, always consider other factors that may be important to you. Does the company pay claims efficiently and fairly, have people reported that claims are settled quickly? How is the customer service experience, can you ask the company questions about your policy easily? Can you make changes such as beneficiary changes easily? Is your financial advisor able to help you service a policy from another company? Is the company from which you are purchasing the coverage financial strong and stable with a long track record? Will the company underwrite you fairly, and give you the health rating that you deserve? These are all important questions to consider before making your final purchasing decision.
The least expensive company may be able to satisfy all of your important requirements, but keep in mind that sometimes paying a little bit more money for a lot better overall experience can be worthwhile.