How Do I Know If a Policy Is Suitable for Me?

How Do I Know If a Policy Is Suitable for Me?

Suitability is a term, which basically means that a certain policy is appropriate for a certain individual. However, the difficult part of life insurance suitability is that there are no clear-cut answers for either consumers or professional advisers. State suitability rules exist in only a small percentage of the states and vary in term of requirements, terms and enforcements.

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Does a Life Adviser Get Paid a Fee and a Commission?

Does a Life Adviser Get Paid a Fee and a Commission?

Due to the potential conflict of interest involved with commissions, there is little movement towards no load/low load policies, which rewards agents with a standard fee not a commission. However, only a properly licensed fee-based planner can retain such a fee. It is also strictly prohibited for an agent to receive both a fee and a commission from the same client, according the California Insurance Code.

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What You Should Know About Your Insurance Adviser

What You Should Know About Your Insurance Adviser

Information about an insurance adviser can be found at the state’s Department of Insurance in which they are licensed to sell and service insurance. Additional information can be found at the National Association of Insurance Commissioners (NAIC) and the Financial Industry Regulatory Authority (FINRA), if applicable. All the information found of these three sources can give you a better understanding of your adviser’s professional background.

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What Do I Need to Know to Find a Life Insurance Adviser?

What Do I Need to Know to Find a Life Insurance Adviser?

The life insurance industry has changed in recent years. Nowadays, life insurance is less likely to be sold by a “traditional” life insurance agent, and more likely to sold by a financial adviser, financial consultant or financial planner. These types of advisers have expanded their selling and servicing abilities to meet the changing needs of consumers. However, all of these changes have made the process of evaluating an adviser slightly more difficult.

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How Do I Know an Insurance Company is Committed to High Standards?

How Do I Know an Insurance Company is Committed to High Standards?

Every insurance company adheres to their own ethical standards as well as to basic guidelines laid out by their state’s Department of Insurance. A new entity called the Insurance Marketplace Standards Association (IMSA) was recently created. Their mission is to promote high ethical standards in the sale and servicing of individually sold life insurance, annuities and long-term products.

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Steps to Finding the Financial Status of an Insurance Company

Steps to Finding the Financial Status of an Insurance Company

Insurance Regulatory Information reports (IRIS) are comprehensive evaluations of the financial statues of life insurance companies, which are issued by the National Association of Insurance Commissioners (NAIC). With more than 5,000 companies filing their financial statement each year with the NAIC, the IRIS financial ratios serve as an early warning system to spot troubled companies.

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How Do Rating Agencies Grade Insurance Companies?

How Do Rating Agencies Grade Insurance Companies?

There are four rating agencies that evaluate and rate life insurance companies, which are A.M. Best, Standard & Poor’s, Fitch and Moody. Each of these agencies has their own method of rating an insurance company. There are internal areas of consideration; financial leverage, management stability, etc., and external factors; competition, diversification, etc. As a rule of thumb, only companies who have received a top rating should be considered.

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