21 June 2012 0 Comments

Don’t Die Without It!

In the opening sentence of my first Blog, I quoted Woody Allen on his disdain for insurance agents. It is only fitting that I end by quoting another humorist, the great Will Rogers, whom I understand once said: “If a man doesn’t believe in Life Insurance, just let him die once without any. That’ll teach him a lesson.”

Hopefully, I have given you enough information to be a smart buyer, so those you love won’t be the ones to learn this lesson the hard way. Talk to an agent!

Your relationship with an agent should be open and informative. It must also be fair for both parties. The agent does not earn income just by talking to you. A sale must be made. He/she also makes very little income after the first year’s premium has been paid. Most term insurance pays no commissions to the agent past the first year and permanent policy commissions after the first year might be only about 2% of what was received in the first year. This doesn’t mean that you shouldn’t expect service from the selling agent after the first year. The first year commission is ample enough to compensate beyond that point. But here’s what I believe to be fair:

  • Don’t use the time and effort of one agent and then hand the business to your buddy who has done nothing to earn it.
  • Question an agent who asks you to drop one policy in order to sell you another. Is it to your advantage to do this or is it just a way to make a new commission?

And that brings us to where I go from here. I’m going to devote several blogs to exactly how replacing one life insurance policy with another can help you or hurt you. Don’t be hurt. Read on!

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