It’s no secret that many consumers frown on the thought of communicating face-to-face with a life insurance agent. This negative thought process goes back to the days when life insurance agents spent a lot of time knocking on doors in their effort to drum up new business.
We are now in the 21st Century, and this is typically no longer the case. Agents finally came to realize that “knocking on doors” does not deliver on ROI (return on investment) since time is such a valuable resource. Besides, they also realized that the people who answered the door with a smile typically had serious issues when it comes to getting a policy issued.
The times have certainly changed. Because of 21st Century technology, consumers can shop and purchase insurance online, at their convenience (and in their jammies). In fact, consumers can purchase groceries, tools, electronics, cars, tax preparation services, and even go to church without leaving the house. Most of us consider this a good thing because online shopping removes the aggravation of negotiation from the shopping process. The shopping process now consists of the following:
Although buying products online is fast and simple, buying services is a different ballgame. There is generally more back-and-forth communication and FAQs that must be reviewed, but even so, consumers can get their taxes prepared, create a will, incorporate a company, and yes, purchase insurance. If all this is possible, why must we interact with a human? Simple, you don’t have to, but you should.
In almost every case the answer is no. In most cases, a life insurer who offers their insurance products online is not really selling direct. During the transaction, the company is very likely to bring a licensed agent into the transaction because you do not fit within their “underwriting box.” This is a good thing. The moment an agent becomes your agent of record, they also become your advocate.
Even when there is no agent involvement, the insurer is not likely to pass the agent’s commission on to you. They will simply divert the commission they would have paid to help pay their marketing expenses. After all, they had to spend money so you could find them.
There are dishonest people in every industry, and hopefully, you’ll never be exposed. But today’s life insurance agents spend substantial resources on licensing and continuing education, and 99.9% will not put their license and reputation at risk. Times have changed, and there are more protections than ever before for the consuming public, and remember, the internet can destroy an unscrupulous insurance agent in a heartbeat.
Unlike other service industries, every licensed agent is subject to penalties, fines, and license revocation when there is even a hint that something nefarious is amiss. Each state’s department of insurance regularly posts notifications to the public when an agent has gone down the wrong path, and it only takes a moment or two to check them out.
An insurance agent, especially an independent insurance agent, offers advocacy. This means that they represent your best interests first and foremost. Career agents that represent one insurer must put their insurance company first, but independent agents are self-employed and only concerned about developing a long-term relationship with their clients.
An independent agent does the shopping for you because they typically represent many highly-rated insurers and can provide a comparative quote in minutes. If you take the career-agent route, you’ll need to make many phone calls or visit many websites to make certain you’re getting the most favorable deal. With independent agents, you do not.
An independent agent will educate you about life insurance and which product represents the best solution for your individual needs. They will help you understand the amount of insurance you need, the insurance product that you need, and walk you through the underwriting process that is typical for any particular insurance product. In other words, they will help you know what you don’t know.
Most life insurance customers put their policy in a drawer and never look at it again, so why use an agent? This is not a bad thing if your life circumstances never change, however, with almost every insurance customer, things happen that require a service request. People get married, they buy homes and have children, they get divorced and remarry, and all of these events will have an effect on that policy you filed in your “important stuff” drawer.
Your insurance agent, in order to offer outstanding service after the sale, is very likely going to check in with you annually. This might come in an email, phone call, or maybe even a visit if you live nearby. They are going to check in on you because you are a client that they care about and they know things change and stuff happens. Their interest is to forge a long-term relationship and remain your advocate. It is highly doubtful that you will ever hear from your insurer after buying direct because it will be YOUR responsibility to contact them about life changes, not the other way around.
This is a great question. Most people who are looking for a reputable service professional start by asking their family and friends, and if they come up dry they resort to a Google search. If you type in “independent insurance agents” in Google, you’re likely to get over 3 million listings. But, if you type in “independent insurance agents” and include your city and state, your search results will be greatly reduced, and you can then scan the first few pages to find an agent near you or an agent that has a ton of positive reviews.
In most cases, you will form an opinion about the agent early on, and if it doesn’t feel like a good fit, go somewhere else. We are talking about minutes here and not hours. The good news is that most experienced and reputable independent agents represent all of the major insurance companies, so you don’t have to worry if you are looking for a particular company, they are likely to have it.