Getting phone calls from life insurance agents keen on selling insurance policies has become commonplace now-a-days. At the same time, insurance agents can be helpful while buying a life insurance policy.
It needn't be mentioned that life insurance is a must for all those having financial dependants. But for buying a suitable life insurance policy with the right amount of cover one requires clarity on goals, risk profile and many other things which one is able to get only after detailed discussions with the insurance agent.
Although there is no fail-safe way to spot an insurance agent who could help you get the right policy and achieve your goals in an effective manner, some of the below-mentioned points may help you take an informed decision.
Where to search for agents
To start with, get references from your friends, relatives or colleagues about their insurance agents if they are satisfied with their services. In addition to agents providing services from their home, several agents have also set up offices and have even started advertising their business. Many life insurance agents have taken up this business as a whole-time career while others do it on a part-time basis. Agents belonging to either of such groups may be proficient in their work and prove helpful.
Related: Difference between insurance agent and insurance broker
The first meeting with agent
On your first meeting with the agent, try to establish if he/ she is interested in making you a long-time client or is merely there for a one-off deal. Unless you are convinced on that front, do not take it forward. Remember, life insurance is primarily bought for the welfare of family members and heirs. Life insurance being a long-term contract with the premium payment spread over several years, the commitment level of the agent to service it for long plays an important role.
While you're getting information about the agent and taking a look at the agent's license, judge how you would get along with him/her in a professional relationship. After all, you're buying life insurance for the long haul, and you will have to share intimate details about your life, finances and plans with your insurance agent. And a good agent will ask you about these things before trying to sell you any policy.
Just watch how the agent begins the discussion. Does he/she straightway start talking about a product? Not all products are meant for all your goals. The product recommended might be the one on which the agent's earning is higher. Unless your goals are discussed at length first, identifying the right product is illogical. Rather, the product recommendation should actually come at the end. Remember, life insurance is not about products but a solution to the problem of how to achieve your life goals.
You need to talk more than the agent. Question him/her at almost every stage. Pose uncomfortable questions too. See if he/she explains insurance concepts in such a way that you are able to understand them rather than using technical stuff to impress you. Look at the confidence level and the product knowledge of the agent and see how convincing the replies are. He/she may not know the answer to every question. . So give him/her credit if he/she promises to get back to you with proper explanation to some of your queries. Life insurance is a complex product and several factors work at the same time in deciding the outcomes. Ensure that the agent is not pushing a specific product to you for buying. Mention the negatives you have heard about other insurers and then see whether the agent gives you a balanced feedback or not.
Related: Are you smarter than your insurance agent?
An agent is supposed to go through life-need analysis before suggesting a product. Ensure that the agent is helping you identify, estimate and provide a solution for the various goals that would arise at different life stages. It's important that your insurance requirement is established taking into consideration your current age, income and family position and the agent helps you get life cover as early as possible. Get to know the claim process and the role of the agent if a claim arises.
Agent's background knowledge level
Getting an agent with at least some working experience of life insurance business helps. Although it's a life insurance business, evaluate how comfortable is the agent with the markets and his understanding about the economy. The agent's grasp of how various asset classes such as equity, debt, gold and real estate work could be a plus point. Remember, he/she may or may not have in-depth understanding of various asset classes and may not have technical knowledge of the market, but look out for any extreme view he/she might have on market conditions or asset classes. An extreme view may not be a good sign.
When it comes to filling up the application form not many agents would suggest filling them up by the buyer. So, if an agent is asking you to fill up the application form - be assured you are probably in safe hands. While doing so, give more importance to the 'terms and conditions' mentioned therein and the 'declaration' below which you furnish your signature.
Related: How to choose the right insurance company?
Remember, the primary purpose of buying a life insurance policy is not to generate high returns; rather it is to be used as a savings and income replacement tool. It helps meet the family members' financial needs in case of one's untimely demise. An agent's role does not end just with selling a policy. He/she is also supposed to help the surviving members of the family at the time of claim. Therefore, once the agent completes the sale, make sure that he/she continues to service you, including providing periodic "insurance checkups" to ensure the policy he/she sold you a few years ago still meets your needs.
Source: Economic Times
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