Your life insurance policy is one of the most important documents you own. Yet it’s also the most overlooked, until the day you need it. The last thing you should want is a surprise. Working with the right life insurance agent is what can make all the difference in the world for you. Choosing the right life insurance agent is essential – it can be a decision that will affect you and your family for years to come. You want someone who is an expert in their field, trustworthy and has experience selling policies. But how do you know if they’re the right person? The easiest way to find out is by asking a few essential questions.
Looking for Life Insurance in Phoenix? Here are Questions to Ask
1. Are you Independent or Captive?
Gaining a better understanding of the operational aspects of how life insurance agents work will help you determine which one to go with, here are some of the differentiators.
Captive agents receive training from one company, and can only get paid if they sell that company’s product. While there is a benefit to using a captive agent, it could also mean that a consumer may purchase a policy that is actually not a good fit for their needs and budget.
On the other hand, an independent agent represents a number of different providers and can “shop around” on behalf of a client. This ensures the best fit for their client at any given time.
No matter who you choose to go with when searching for life insurance in the Phoenix area, make sure your agent offers full transparency in who they are working for and how they plan to provide you with the best possible coverage.
Here at Life Matters, we are independent agents who shop around on behalf of our clients with access to nearly 20 carriers.
2. Are your quotes medical or non-medical?
When it comes to purchasing life insurance, there are a few different options available, and your health will determine which way you’ll go about doing this. Understanding the difference between medically underwritten and non-medically underwritten policies will help ensure that you make the best possible choice.
Medically underwritten policies require a medical exam, blood and urine work, APS reports, and much more.. These policies may result in lower premiums but are often rated or even declined because of the amount of information exposed during the underwriting process.
Non-medical policies do not require a medical exam and keep your medical information private.
Deciding which direction is right for you is something you should choose carefully, and only after a thorough review and education from a professional life insurance agent who has your best interest at heart. Hence, you understand the risks you may be taking. If you choose the wrong direction or order, you may even find yourself uninsurable. The right agent will present and explain both options and allow you to decide which is the best direction to go.
3. Should I Get Term, Whole, Cash Back, or Universal Insurance?
A term life insurance policy will last a specific amount of time, while whole life (which also builds a cash value) will remain in effect until you reach an advanced age or die.
Whole life insurance policies are usually more costly initially but may be cheaper over time due to their longer duration. However, if someone is relatively young, they might consider purchasing a term policy and converting it later to a whole life policy to lock down some savings with lower premium payments.
A comprehensive intake session can help your agent make the best recommendation for your needs. Schedule one here.
4. How much coverage do I need?
The answer largely depends on your financial obligations and goals and any dependents you have living under your roof. If you’re looking for more protection for your family, you can purchase a policy with multiple beneficiaries to be covered. Life insurance is not one-size-fits-all. You have assets, resources, other coverage, income, and a host of other factors that can help determine the right amount of coverage for your needs.
A solid agent will help you by asking all the right questions and then making recommendations that make sense based on your answers. Make sure you choose your coverage amount, not your agent, who may be primarily interested in a high commission payout.
During an intake meeting, here at Life Matters, we explore all coverage options.
5. What will my monthly premiums be?
The cost of life insurance premiums will also vary based on the amount and type of life insurance coverage requested. A higher premium generally means better protection than the total value received should something happen (a more significant sum is paid out).
With some policies, you want to pay out the LEAST amount you can. With others, you will want to pay out the MOST you possibly can. If your agent cannot explain the difference and volunteer the education to you, thank him for his time and walk away.
6. How long do I need coverage?
Do you need a short-term strategy for 10 or 15 years? Or something longer, like 30 years? Or maybe you need permanent coverage that never goes away. The answer to this question refers to how long an individual wants their policy to remain active until it expires or reaches its benefit maximum.
Generally speaking, this would only apply if someone has purchased whole life insurance, as a term policy terminates at some point prior to that expiration date. This provides more flexibility but might reduce benefits over time due to smaller payout amounts vs. someone who purchases permanent lifetime coverage from day. Or, maybe you need a policy that provides you a higher amount of up-front coverage during the first 20 years and a smaller, permanent plan that remains after that.
You should factor in many things in your life: mortgage, retirement income and age, children, college, debt, and more. Make sure your agent considers all these factors before giving advice or answers to these questions.
7. Am I getting coverage with full living benefits?
Does your policy payout if you don’t die? Living benefits refers to what will happen if the person who purchased coverage dies and leaves dependents behind. A policy with a living benefits rider could provide money for the policy owner themselves, not just the beneficiaries.
In comparison, a standard term policy does not have this feature. Yet, the number one reason why people file for bankruptcy is because of high medical bills from a major illness, such as cancer, stroke, heart attack, organ failure, and more. Income drops and medical costs skyrocket. Since a regular life insurance plan doesn’t pay out unless there’s a death certificate, you’re stuck in the middle, where people often lose their homes and encounter other financial disasters.
Having the flexibility to access a portion of your death benefit while you’re still alive can be a game-changer for most people. Old life insurance plans have a death benefit only, but some of today’s carriers offer full living benefits if you qualify. It’s the difference between a flip phone and a smartphone.
8. Do you offer tips for improving life after the policy is signed?
Life insurance companies are known for making a sale and going on to look for the next client. But at Life Matters, we operate a little differently. We realize this is not a typical question to ask when you’re shopping for life insurance, but we’re not a typical life insurance agency!
Once a policy has been written to protect your life, our work has not ended. It has just begun.
After protecting your life, our mission is to help you make your life matter. We offer a host of free tools to all our clients (and non-clients) to do just that—mental health, meditation, habits, positive thinking, discovering and pursuing your purpose, and more.
When you have a life insurance policy with Life Matters, it’s much more than just the transaction of a contract. We also perform annual reviews free of charge, where we check in with you briefly to make sure your policy is up to date with the best coverage and pricing. It’s also an opportunity for you to make any updates, as life insurance policies are often tossed in a drawer and forgotten for years or even decades.
Finding the right partner for your life insurance can make a whole world of difference in how you live the rest of your life. You want to rest assured if anything happens, your loved ones are taken care of, and not only that, you want to live your best life until then! We can help with both of these.
9. Are my rates level and locked?
Far too many people get into a policy, and 10, 20, or 30 years down the road are hit with price increases to which they are contractually bound. Their only recourse is to cancel the policy and apply for a new one. Sadly, it comes at a time when life insurance is much more expensive because of age and health conditions. With some policies, the rates go up the older you get.
The tragedy to this is, insurance companies time it this way because as you get closer to the end of your life, the policy becomes too expensive to keep, and you often end up having to drop the policy just before you would use it.
10. Are you selling me or educating me?
Selling or educating is a question to ask yourself while meeting with an agent. The right agent will have your best interest at heart, not his pocketbook. If you feel pressured into a plan that doesn’t feel right and isn’t backed up with a sound explanation and strategy, you should find a new agent. Make sure your agent has YOUR best interest at heart and is recommending options that make sense for you.
A good agent will do a complete intake first and make recommendations ONLY after fully understanding your needs, health conditions, goals, income, and other factors. Then you should feel 100% comfortable applying for a policy on your timeline and within your budget. Insurance is not the place for arm-twisting and high-pressure sales tactics. No matter if you’re looking for life insurance in Phoenix, or anywhere else in the U.S., you’ll want to be prepared with the right information to help you make an informed decision.