by Susan Paige
When a life insurance agent is selling you a policy, there are some things they will not tell you. For obvious reasons, an agent will hide some level of truth from you because they want to sell quickly and earn their commission. These could be things that affect them directly or those which affect you. Even before engaging any life insurance agent, you need to know the basics of life insurance to avoid getting a policy that you don’t need. The following is a quick rundown of some of the secrets that your agent will not tell you, but are important to know about.
There Are Yearly Commissions
While this does not apply to all, there are some life insurance companies that offer yearly commissions upfront. This means that the agent gets their yearly commission upfront when they make an agreed sell. So, some agents will push for very expensive policies that you might not need, just to get their commission.
Here is what veteran life insurance agent from InsureChance had to say: “We get your first year’s premiums. The good part is it doesn’t cost you anything extra and we help you shop around. The bad part is some agents out there are swayed by companies that pay the sum upfront and tend to sell those companies over those that pay monthly. This creates a bias and can make you overpay for coverage.”
You want an agent who will advise and sell a policy that suits your needs, not the one who is selling what is best in the market to get their instant commission. Make sure to tell them what you are looking for, but if they still insist to sell you something that does not make sense to you, consider looking for another alternative.
A Good Agent Represents Multiple Companies
If your agent only represents one insurance company, then they might not be in a position to offer you what you need. A good agent represents multiple companies, but if you don’t know what you might end up buying the only offer available to your agent.
The reason as to why you need an agent who represents more than one company is that they have a list of rates from different companies, so you are likely going to get a good offer for what you need. Also, chances are that an agent who represents one company wants to make a quick sale, and they don’t care whether the offer is suitable for your needs or not.
Different Health Risks Have Different Rates
If you have a health condition that may affect your approval for some life insurance policies, but that does not mean that you have to miss out on life insurance, or that you will end up getting the worst offers. Each company will offer different rates for different health risks, so regardless of what your condition is, you stand a chance of finding a suitable policy. Before deciding on a policy, check the different options available and avoid an agent who is trying to sell you the lowest policy rates available.
Whole Life Insurance is Not a Good Investment
Another secret that a life insurance agent will not tell you is that whole life insurance policies pay high commissions. Whole life insurance might not be necessary for you, but they will want you to buy it so they can get their share of the commission. Your agent will not tell you that a whole life insurance policy is not a good investment.
First, whole life policy premiums are absurdly high, more than ten times what you would pay for term life policy premiums. While the premiums are this high, the returns are unreasonable and they are not as advertised. Also, whole life insurance policies are complex and have hidden ongoing fees that won’t be revealed to you when buying the policy.
It also provides a cash/savings component which you can borrow against, but this might actually affect your policy negatively. So, a life insurance agent who is trying to sell you a whole life policy might only be after your money, look for someone who is keen on your interests.
Not all life insurance agents are willing to tell you some of the secrets above. Oftentimes, those who are not willing to tell you the truth are not interested in helping you, rather are only interested in getting paid. When you are aware of some of these secrets, then you will be in a better position to tell apart a good and a selfish agent, as well as making the best decision for your life insurance policy.