Life Insurance Brokers

If you’re in the market for life insurance, it is probably wise for you to contact a number of life insurance brokers before trying to negotiate this fairly complex industry by yourself. You should feel comfortable with the person you select as your broker, because you’ll ultimately be confiding in them a lot of extremely personal information regarding your health and basically all of the details of your financial life. For that reason it’s usually best to get a recommendation from someone you know and trust.
Some people are turned off by the predatory nature of these types of commission based brokers. That doesn’t mean they won’t or shouldn’t play an important part in your search for the best and least expensive life insurance for your needs. It is important to note that while they of course aren’t always looking out for your best interest (since it is a commission based business), they can still manage to get you some of the best deals around, and they can also provide you with many more options in a shorter time span than you could otherwise get yourself – even with the power of the internet at your disposal.
This is also their industry, so a life insurance broker would be able to help educate you on the many types of life insurance available including discount term life insurance and whole life insurance, the most common types available on the market, as well as more unusual types of life insurance such as variable annuity life insurance and return of premium term life insurance, as well as the difference between whole and term life insurance. They will have relationships at many of the major life insurance companies and they will also have an understanding of how the process works for the physicals the life insurance companies will administer before determining if you’re a good candidate to be insured by them.

The Potential Problems with Using a Life Insurance Broker

The other side of the issue is that they are commission based salesmen in an industry that has extremely difficult to understand terms, conditions and policy types.  This is all not to mention that you are dealing with large amounts of money to be paid in premiums each year for a contract that can in many cases last for the duration of your lifetime.  If you do not understand what the broker is describing to you, then ask him or her to explain it again and again until either you understand or one of you admits defeat and realizes this is not a policy for you.  My agent tried to convince me to purchase a really complicated variable annuity life insurance policy and I literally spent over an hour with him explaining it and it still didn’t make sense.  I’m a financial professional, so if I don’t understand something in an hour, then it probably can’t be understood (or isn’t meant to be understood).  I subsequently read articles on that type of life insurance policy that described it as a scam and something that should be avoided at all costs.  If I just let him talk me into it, or if I felt stupid asking questions, I would have been stuck with a financial albatross for decades to come.  Don’t be ashamed to ask questions – that is what your life insurance broker is there for.

The Benefits of Using a Life Insurance Broker

A life insurance broker is going to be extremely knowledgeable about the entire life insurance industry.  They will know what companies offer competitive prices across the different types of insurance; they will know which companies are stronger and more reputable and therefore will be around for as long as you intend your policy to last for.  They will have dealt with dozens or hundreds of clients in your same position and will be able to give you advice on what they feel is the appropriate amount of insurance and the appropriate type of insurance.  They will know when prices of policies are at a reasonable level and they will also keep in touch with you to let you know when prices have decreased and you should consider buying a new policy and discontinuing the old policy (they make a commission on each policy sold, so this is mutually beneficial).