4 Considerations When Choosing Your Insurance Agent

4 Considerations When Choosing An Insurance Agent

If you’ve been active on various social media platforms, chances are, you’ve already been contacted by a friend, an acquaintance, a classmate from high school or college, or even a stranger who is an insurance agent offering an essential product that we all know – life insurance.

Don’t get me wrong. I also believe that life insurance is crucial in our financial journey. However, some insurance agents trying to sell them are more concerned about their commission over your welfare.

So, if you’re planning to get life insurance, you need to consider these things. On the other hand, if you’re an insurance agent, you may also need to consider these things when someone is inquiring about insurance.

Disclaimer: I am not an insurance agent and have no connection with any insurance company. However, I own insurance that is based on my needs. I also talked with many insurance agents before deciding on my current agent. This post will also cover only life insurance and VUL. I didn’t include non-life insurance.

Related: The 5 Levels of a Strong Financial Foundation

1. Is the company your insurance agent represents a reputable institution?

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The first consideration before choosing an insurance agent is identifying their insurance company. You can choose from many insurance companies offering various insurance (both life and non-life) and investment products.

However, if you’re considering buying one for the long term, it is essential to identify which companies have been around long enough and have a demonstrated history of staying afloat despite market uncertainties.

It is also crucial that you research before talking with insurance agents about the products their company offers to avoid getting pushed into products that you don’t really need.

You may refer to this website regarding the authorized insurance companies in the Philippines. Click here.

2. Is the insurance agent asking about your current financial status?

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When an insurance agent presents their products, are they inquiring about your current financial status, like your debt obligations and mortgage, your current income, and how much you can pay as a premium?

They must also ask if you’re insured and how much insurance coverage you already have, so they will know how to adjust their approach to their pitch.

When insurance agents present themselves as Financial Advisors or FAs, they must advise you based on your current financial status and not simply try to sell you something.

Remember that when choosing the right financial advisor for you, you need someone willing to grow with you and focus on your needs, even at the expense of their commission — not the other way around.

3. Is the insurance agent being pushy for a specific product?

a lady insurance agent explaining a document to a couple
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Let me be frank, but variable universal life insurance, or VUL, is not the answer to everything and is not even the best investment for everyone’s current situation.

However, some insurance agents are too pushy about specific products beyond what their potential clients need, which only means they are more concerned about how much their commissions will be and not about their client’s future – walk away from these people.

A VUL is indeed an investment, but the primary purpose when getting a VUL is for its insurance part and not on its investment side.

For instance, I heard and read of insurance agents offering VULs to parents for their young children and infants who mask the product’s intent as an educational fund and a future investment.

What frustrates me about these agents is that they offer a high premium on a product whose primary purpose is to insure the policyholder – in this case, the child.

So, if you’re a parent and bought a VUL for your baby, are you expecting the baby to be out of the picture soon? Because, to be honest, the sum assured of the VUL will only kick in the event of the sudden demise of the policyholder, which in this case, is your child.

What I am saying is if you need investment for your child’s future education, you can directly invest in PAG-IBIG MP2, mutual funds, UITFs, bond funds, or even in the stock market to ensure that the full amount of your premium is going directly for your intended purpose.

Absolute Beginner’s Guide to PAG-IBIG MP2
Invest with as little as P50 with Mutual Fund
Absolute Beginner’s Guide to the Philippine Stock Market

4. Is the insurance agent patient about your questions?

an elderly man consulting an insurance agent
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Lastly, since your insurance agent will be your partner for a long time, they must be patient with your questions.

It is also crucial that they don’t withhold important information needed when claiming the benefits, including the fine print of the policy.

It is important to be careful because there are instances when a policyholder dies and doesn’t have the necessary documents to claim the benefits, resulting in frustration and anger.

So, it is important to have at least an annual policy review with your agent to clarify any questions you have and adjust any parts of the policy.

Related: Why We Should Always Ask Questions

Final Thought

Your life insurance is a critical aspect of a strong financial foundation. It also offers peace of mind for breadwinners that their beneficiaries will not be financially burdened if an unforeseen incident happens to them.

However, it is still important to note that a VUL is not a one-size-fits-all investment product, like what some insurance agents make them seem.

So, when choosing your insurance agent, you need to be careful who you choose because they will be your partner for a long time and will be your family’s contact if they ever need to claim the benefits.

Remember that though some insurance agents are more concerned with their commissions, there are still many out there who are genuinely concerned with you and your family’s welfare. So, you have to choose carefully.

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