Life insurance is a long-term decision, often lasting 20 years or more, so the advice you get at the start matters. A good life insurance agent helps you work out how much coverage your family needs and which type of policy fits your budget. A poor one may push an expensive product you do not need. Here is how to tell the difference.
Life insurance agents are usually paid by commission, and commissions are often higher on permanent policies than on term.
Independent agents can compare several insurers, which helps if you have health conditions.
A good agent starts with your needs, not with a product.
Types of life insurance agents
Captive agents
Work for one insurer and sell only its policies. They can be knowledgeable about that company’s products but cannot compare others.
Independent agents and brokers
Can quote multiple insurers. This is valuable because life insurers price health conditions, smoking and hobbies differently. One company might rate you much better than another.
Financial advisers
Some financial planners also hold insurance licenses. Fee-only planners do not sell products and can give an independent view on how much coverage you need.
What a good life insurance agent does
Calculates how much coverage you need based on income, debts, mortgage, children’s education and existing savings
Explains the difference between term and permanent life insurance in plain language. See our guide to types of life insurance policies.
Shops your application with insurers that suit your health profile
Helps with the medical exam or explains no-exam options
Reviews your coverage after major life events
Questions to ask before you buy
Which companies can you quote for me?
Why do you recommend term or permanent coverage in my case?
How did you calculate the coverage amount?
What is your commission on this policy?
What happens if I stop paying premiums?
Can this term policy be converted to permanent coverage later?
Red flags
Recommending an expensive permanent policy before asking about your goals and budget
Describing life insurance mainly as an “investment” without explaining fees and surrender charges
Encouraging you to cancel an existing policy and buy a new one without a clear benefit (sometimes called “churning”)
Pressure to sign quickly
Check the agent’s license
Life insurance agents must hold a life (and often health) license in your state. Verify it on your state department of insurance website. Our agent vetting checklist lists more steps.
Frequently asked questions
Do I need an agent to buy life insurance?
No. Many term policies can be bought online directly. An agent is most useful if you have health issues, complex finances or want help deciding how much coverage you need.
Will using an agent make my premium higher?
Generally no. Life insurance premiums are usually the same whether you buy directly or through an agent; the commission is built into the price.
This article is general information, not financial or insurance advice.
