In the past, life insurance was normally sold and serviced by a traditional life insurance agent, but this has changed in recent years.
In fact, there are very few traditional life insurance agents who only sell life insurance and other related life insurance products. Nowadays, they are often referred to as financial advisers, financial consultants or financial planners.
Advisers with any one of these titles have most likely expanded into selling and servicing newer forms of life insurance as well as other insurance policies. Also, Certified Public Accountants (CPAs) are now getting into the business of selling life insurance.
However, all of these changes have made the process of evaluating a life insurance adviser slightly more difficult. Now there are more factors to take into consideration before making a decision.
The following are some issues to keep in mind when looking for an insurance adviser.
The agent system has also changes; historically, almost all agents were once called “captive”. Meaning, they only sold policies for the company with which they were affiliated.
Today, there are still quite a few “captive agents”; however, a majority of them are brokers who represent multiple insurers. Some “captive agents” sell other companies’ policies, while some can only sell their own policies.
This is an important regulation to figure out.
An adviser should represent multiple companies. If they only represent one company, they can only offer you policies from that company – not necessarily the best policies in the market.
Use an Advisor Referral Service, though most will provide less than optimal results. The following two services are a good place to start.
Society of Financial Service Professional’s Referral Service
This organization originally started off as an alumni organization for Chartered Life Underwriters (CLUs) and Chartered Financial Consultants (ChFCs), but has expanded to include many other financial service professionals.
Again, these other professional’s may be highly qualified in their specific niche and not well educated about life insurance.
Click here to access their website.
The Life and Health Insurance Foundation for Education
This is an excellent service that provides a wide variety of information on their website, which includes an online agent locator tool. However, it is a database for members of the National Association of Insurance and Financial Advisors (NAIFA), which have less stringent standards than the SFSP.
Prior to using their agent locator service, you may want to check out the NAIFA website to learn more about their members.