4 Considerations When Choosing Your Insurance Agent

Recently updated on: November 18, 2023

If you use social media, you've likely been approached by someone offering life insurance. This could be a friend, acquaintance, classmate, or even a stranger who works in insurance.

Don't get me wrong. I also believe that life insurance is crucial in our financial journey. Unfortunately, some insurance agents prioritize their commissions over your well-being when selling policies.

So, if you plan to get life insurance, consider the following. On the other hand, if you're an insurance agent, you must consider these things when someone inquires 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.

Related: The 5 Levels of a Strong Financial Foundation

1. Does Your Insurance Agent Represent a Reputable Institution?

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Before selecting an insurance agent, it is important first to identify the insurance company they represent.

Several insurance companies offer life and non-life insurance policies and investment products for you to choose from.

However, if you're thinking about purchasing something for the long run, it's crucial to determine which companies have a substantial track record of staying strong even in uncertain market conditions.

Before speaking with insurance agents, it is important to research the products offered by their company. This will help prevent being pressured into purchasing unnecessary products.

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 and mortgage obligations, 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.

If an insurance agent introduces themselves as a Financial Advisor or FA, their advice should consider your current financial situation rather than just trying to sell you a product.

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 Too Pushy for a Specific Product?

A Lady Insurance Agent Explaining A Document To A Couple
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To be blunt, a variable universal life insurance (VUL) isn't the best investment for everyone's current situation and is not a universal solution.

Unfortunately, there are insurance agents who focus more on their commissions than their clients' needs. So, they pressure clients to purchase products that aren't necessary. 

It's best to walk away from these agents and seek out someone who has your best interests in mind.

Although a VUL can be considered an investment, its primary purpose is for insurance rather than investment. So, consider the alternatives.

I have encountered situations where insurance agents sell VULs to parents for their young children and infants disguised as an educational fund and future investment.

I find it frustrating that these agents charge a high premium for a product meant to provide insurance for the policyholder, specifically the child.

As a parent who has purchased a VUL for your baby, are you anticipating your child will no longer be in the picture soon? It's important to note that the sum assured of the VUL will only be activated if the policyholder, in this case, your child, passes away suddenly.

So, if you want to invest in your child's future education, consider investing in PAG-IBIG MP2mutual funds, UITFs, bond funds, or the stock market. This way, you can ensure that your premium goes directly toward your intended purpose.

4. Is the Insurance Agent Patient About Your Questions?

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Finally, it is important to choose an insurance agent willing to be patient and answer your questions, as they will be your long-term partner in this journey.

They must also provide all necessary information about claiming benefits, including the details in the policy's fine print. Withholding any important information can have negative consequences.

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, having at least an annual policy review with your agent is important 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 and offers peace of mind for breadwinners.

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

So, when choosing your insurance agent, you must 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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