Finding a good life insurance agent is like buying onions and potatoes these days – they cause a hole in your pocket and more often than not, they are not upto the mark. If you want to get your dish right, you need to select your veggies carefully – similarly, if you want to get your financial planning right, you need to select the right life insurance product among the different types of life insurance policies available.
And only one person can help you do that. That is your life insurance agent.
Most of us have been associated with life insurance advisors through our parents who forced us to pick up an LIC policy because the advisor was their friend. We did not choose them ourselves then. But you can do so now.
Use the below tick in the box approach to find a good life insurance agent or advisor.
How does Life Insurance Agent sell you a policy ?
Most agents glibly ask the investor how much premium they can afford and then offer a policy to match the premium. That is the worst way to sell an insurance product. Check whether your life advisor asks for your needs. If he puts forth questions like how much insurance you already have, how much do you need to spend on your children’s education and marriage or how much money do you need to retire, then he is going down the right path.
The advisor needs to ensure that your goal based investing approach matches the maturity of the products so that your needs are taken care of.
Is he armed with tools and calculators ?
Using thumb rules to find out how much life insurance you need is acceptable but he ought to devote sometime with his tools and calculators to do some number juggling to justify the numbers.
Remember, if you end up taking a huge life insurance, you are paying more money in the form of premiums which could be put to better use and if you are taking less cover, then you could possibly be under insured.
Make sure you get it right.
Does he make your products churn ?
Good life advisors will not ask you to sell your current policies and take new ones. If this happens, be wary and ask questions.Insurance is not an investment avenue which you get in and get out of every alternate year.
He must be appreciative or disapproving of the products you have and he should ideally suggest you check with your financial planner whether the products should be retained or moved out of your portfolio but he should not be pushing you to get out of them now so that he can sell his.
If you have taken insurance clubbed with investments (non term plans), remember you need to stick around for a long time as these are long term products. Churning is bad.
Does Life Insurance Agent utter the word TERM PLAN ?
Remember that life advisors earn commissions on the product they sell, so they will want you to buy the ones that fetch them the most money. And term plans just don’t do that. So life advisors seldom speak about it.
They will want you to purchase Unit Linked Insurance Plans (ULIPs), endowment plans, money back plans or pension plans where the cut is comparatively larger.
You have chosen a decent life insurance agent or seller if he sells you term plans or explains why you do not need them.
Other points to note
Needless to say, a better life advisor is one who knows about the products in the industry and how they compare to each other. Your agent must know why the other products are not good to have and why his is the best – a simple answer that it belongs to the Reliance brand will not fly.
Check whether he is involved with you while he fills in the application forms. If he is skipping critical details and ticking all the “No” and “N/A”s in the form, then he is probably a less informed individual who does not understand the significance of what incorrect data could lead to.
A good advisor is one who checks how much cover you already have and how much you need more and then plans for it.
Be extra careful of fly by night agents who vanish within a year or less. You will be left stranded trying to reach out to the new ones who will anyway be reluctant to serve you as they might be earning a pittance or nothing in continuing to serve you.
Chose a decent life insurance advisor who can be your guide and friend at the same time.
You will need to search a lot because most of the potatoes and onions are rotten and the ones that are good are few and far between.
Education is the most important step in buying an insurance product. Remember that the agent will always want to sell his product to you. So the dispassionate analysis of your specific needs would be missing in the buying process. A more appropriate alternative is to learn more about the insurance products on the internet with a good Insurance Guide and post that contact an agent or a financial advisor armed with more relevant information, so that he can help you out.
very good advice