Your health insurance premium just went up, your sick friend has been forced to sell his house since he can no longer go to work, you just had a baby and wonder how the bills would be paid if you were to be killed in a car wreck.
These are just a few of the reasons that people call an insurance agent. The insurance agent is supposed to be able to help. Before you pick up the phone, ask yourself the following questions.
Do I Even Need Insurance?
It is not necessary for you to pay insurance premiums if there are other ways in which to pay your expenses. If you have been fortunate enough to save enough money to pay your commitments, you do not need Life insurance, Long Term Care or Disability insurance.
You may not need Major Medical insurance. The cost to pay for routine medical care may be affordable. If that is the case, you may want a High Deductible Health Plan. It will help with those catastrophic medical bills for severe accidents and illnesses.
If you are on the other end of the spectrum and have no savings and an income that is below poverty, you have no need to spend money on private Long Term Care or Major Medical insurance. If you can qualify for Medicaid in your state, both those types of insurance will be provided for you through your state government. You may still want to consider a small Life insurance plan so that your family has the money to pay your final expenses.
Insurance is nothing more than a financial tool. It builds a pile of money from which you can pay bills if you do not have, or are not willing to use, the money that you have in savings.
Am I Willing To Talk?
Contrary to what the comedians say, a good insurance agent is more adept at listening than talking. He will want to know what you want to accomplish, who you want to benefit, how much you will need and how much you are willing to spend to secure your insurance. Depending on what type of insurance in which you are interested, he will also want to know the answers to some underwriting questions. He is going to ask you a bunch of questions. Be willing to tell him the truth. He can only propose a workable plan to meet your needs based on the information he is given.
A good insurance agent will focus the conversation on you and your needs. He will use the pronouns, “You” and “Your” much more often than “I” and “We.” He will have to tell you a little bit about who he is and what insurance companies he represents. That should only take a few minutes.
By far, the most important thing that should be discussed is what your needs are. Those needs, and an appropriate solution, can only be discovered if you are willing to be honest about what you want and how much you are willing to pay.
Am I Willing To Listen?
After your insurance agent has gathered all your information, he will need to give you a proposal. Often, that proposal is going to be just one plan. Whenever possible, I try to allow my clients to choose between no more than 3 different plans that will meet their needs. I want them to feel like they have a choice but I have learned that clients get confused if they have too many choices. A good insurance agent will eliminate many plans but still give you options from which you may choose.
In order to solve all your desires, a good insurance agent may have to “think out of the box.” Often, one policy will not meet all your needs. You may have to be willing to listen to the entire plan that your insurance agent has drawn up for you.
Over the last few years our politicians have told us that we should be able to buy insurance by ourselves over the internet. The application is only one of what the insurance agent’s duties. There is much for you to consider before you get to the application. There are many different types of insurance. Most of them have limitations and exclusions. You will need to decide which limitations are acceptable and which are not. A good insurance agent will be able to help you see what the limitations are to your policy and offer insurance supplements to “plug those holes.” However, you need to be willing to listen to his comments.
For example, Major Medical insurance will not pay your mortgage if you get sick and are unable to go to work. In that event, you will need Major Medical insurance to pay your doctor and Disability insurance to pay your mortgage.
Can I Trust This Insurance Agent?
There are several things that you can investigate to see if the insurance agent you engage is trustworthy. You can verify his licensing, education and experience. By law, any person who professionally helps people with insurance must be vetted by the state. State licensing requires that all agents are able to pass a background check for prior “white-collar” crimes and demonstrate a basic level of knowledge about insurance.
As a result of the license, there is a government regulatory body to whom you can appeal if something “hinky” happens. You do not have to wait for the delays involved in court cases.
State licensing is not fool-proof. Not all insurance agents are the same. Most insurance agents are good. They are going to work with you to find a solution to your problem. Unfortunately, there are some who are less than professional. Rather than solving your needs, they are interested in lining their pockets. They have no problems trying to make one type of insurance do everything. Beware of them.
Perhaps, the most important thing that you can do is ask your friends who they have used and trust. Just be advised that a good scam artist is able to convince his mark that he can be trusted. Your friends can only tell you if an insurance agent can be trusted after they have used the insurance and found it to meet their needs.
Hopefully, the pointers in this post will help you find a local insurance professional to help you. If you want to learn more, get our book, “How To Find An Insurance Agent To Love.”