Most people apply for life insurance through an agent, licensed by the state, who may represent one or more companies. If you use an agent, choose carefully. They earn a commission on your business.

A professional should do more for you than just sell you a policy. They should help assess your insurance needs, answer your insurance questions, and help you establish your goal. They should advise you, and help you update your insurance.

How do you choose an agent?

You might want to start by collecting the names of several agents through recommendations from friends, family, and other sources. Beyond this, many Web sites offer directories of agents and tools to get you started. For example, try InsureMe.

Here are some things you might want to ask the agent about:

• Are they licensed in your state? All states require agents to be licensed to sell life insurance. In addition, agents who sell variable products must be registered with the National Association of Securities Dealers and have additional state licenses.

• What company or companies do they represent? Ask the agent which company he or she represents and what types of policies these companies sell. Before an agent can sell insurance for a particular company, the company must appoint the agent as its legal representative. A captive agent represents one company only, much like an employee of the company. This agent might show you different kinds of policies, but each will be with that same company. An independent agent may represent numerous companies and sell you a policy from any of those companies.

• Do they have any professional designations? Many agents have extensive education beyond the bare minimum required for a license. These agents may use initials after their names to let you know you are dealing with a well-trained professional, such as:
  • CLU: Chartered Life Underwriter
  • ChFC: Chartered Financial Consultant
  • FLMI: Fellow of Life Management Institute
  • CFP: Certified Financial Planner

• Are they a member of any professional organizations? The major association for life insurance agents is the National Association of Life Underwriters (NALU). NALU's local associations provide educational seminars and help update agents on trends. Similar training and services for financial planners are available through the American Society of CLU & ChFC, Institute of Certified Financial Planners (ICFP), and International Association for Financial Planning (IAFP).

What can you expect during an agent's visit?

The agent will meet with you to discuss your life insurance needs. He or she will ask questions about family income and your net worth. With the information you have already assembled about your personal goals and financial situation, you'll be able to discuss your insurance options.

Be prepared to answer questions about your health. For example, you can expect questions about your age, medical condition, medical history, family history, and personal habits. When you apply for life insurance, you may also be asked to have a medical exam. Often, a licensed medical professional will make a personal visit.

Always answer questions about medical history and health carefully and truthfully. In the event of a claim, inaccurate or untruthful answers may cause delay or even denial.

What can you expect an agent to do for you?

The agent should be willing and able to explain various policies and other insurance-related matters. You should feel satisfied that they are listening to you and looking for ways to find you the right type and amount of insurance at an affordable price. If you are not comfortable with the agent, or you aren't convinced he or she is providing the service you want, find another agent.

Life insurance can be very complicated. A good agent can help guide you by explaining the options and identifying those that best match your personal needs. But a dishonest agent can confuse you with a pitch designed for high sales commission with little regard for the impact on you.

Although the agent represents the insurance company, a good agent can be your best ally and advocate if you have a problem with the company.

The answer on this page was edited based on source material from the Ohio Department of Insurance. These pages are no longer being updated. --Webmaster

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