Find the Best Life Insurance Brokerage for Your Client
Life insurance products are a great asset when helping your clients plan for their financial futures. For most people, life insurance is the most cost-effective option to guard against the repercussions of an unexpected death of a loved one or business partner. It can also be leveraged for retirement and estate planning. A well-managed life insurance policy is sure to provide peace of mind for your client and their loved ones.
Each client is unique, and finding the right life insurance policy takes time, effort, and knowledge about the details of each different product. There are four primary types of life insurance policies available, each of which has advantages, disadvantages, and even subtypes with unique features. Working with a life insurance brokerage agency with knowledge of a broad range of products and access to multiple carriers can give you a significant advantage.
What are the different types of life insurance?
Term life insurance policies are non-permanent life insurance products that offer an affordable death benefit for a fixed premium and a fixed period. Carriers generally offer term coverage for periods of 10, 15, 20, 25, and 30 years. Basic term life insurance coverage is very similar from carrier to carrier. However, it is important to look closely at the provisions and riders offered by each carrier, as they can vary greatly.
Universal life insurance policies are permanent life insurance products that include a cash value savings component. The cash values savings component is an additional premium above the cost of the insurance. In other words, the amount you pay into the policy gets split between the premiums required to maintain the policy and a cash savings account. That savings account works similarly to a traditional savings account and accrues additional cash value over time.
Whole life insurance is a type of permanent life insurance product that offers a guaranteed death benefit and guaranteed cash value accumulation, as well as the potential for additional non-guaranteed cash value accumulation in the form of dividends. Whole life offers the most guarantees of any life insurance product and is also the most expensive.
Group life insurance is a type of life insurance product offered by an employer to employees. In other words, a business or other employer purchases a life insurance policy and extends coverage to its employees. Group life insurance coverage is commonly included alongside other employer-sponsored benefits, such as health insurance, and is often inexpensive or even free for employees.
How do I find the best life insurance policy for my client?
The purpose of owning life insurance is different for every client. Consider your client’s goals, insurability, finances, health, lifestyle when comparing policies. Don’t price shop. In most cases, a small increase in premiums can add significant value in the form of conversion provisions, living benefits, and other policy specifications. Be sure to do your research. Look past the face value of the product and dig into the details. Understand what you are purchasing and the coverage you will be getting.
Working with an insurance brokerage agency may be the best way to shop multiple carriers. The best brokerages will work closely with the carrier to design the best solution for your client and can be the difference between purchasing a great fit that meets their goals and an inferior product with insufficient coverage.
How do I find the best life insurance broker?
There are several ways to find high-quality life insurance brokers. Start by asking your network for referrals. You can connect with NAIFA, a trusted nonprofit association for insurance brokers and financial advisors.
You can also do your research by prospecting several insurance brokerages in your area. We recommend looking for these qualities in a broker:
- Responsiveness and attentiveness. Are they knowledgeable of the products and solutions available to serve you and your clients’ needs?
- Tech-savvy. Do they know how to use and leverage technology?
- Back-office support. What happens after an application is submitted?
- A good team instead of just a good salesperson: make sure that the service is as good as the pitch. Service can make or break a relationship.
- Do the owners invest back into the agency or focus on paying themselves?
You can also learn a lot about the brokerage by calling them up and asking pertinent questions, such as:
- How long have you sold life insurance?
- Have you had any complaints with the state?
- Who are your primary carriers?
- What are the carrier ratings?
- What types of products are the affiliate carriers selling?
Do your homework and determine if the brokerage gravitates towards products with the most commission. Most importantly, visit the agency. Do an onsite visit and speak with the brokers in person
EMG can help.
As a brokerage general agency, EMG handles everything from submission to commission. We have strong relationships with over 30 insurance carriers, allowing us to find the best carrier for your client based on the purpose of coverage, product type, and underwriting obstacles. You’ll have access to a dedicated case manager, sales team, and carrier underwriters who will work closely with you throughout the process to customize solutions to the unique needs of each client.
Connect with us by phone, online, or in-person, or schedule a consultation with your sales director today on how to grow your business.
Frequently asked questions about life insurance.
What is the difference between a life insurance agent and a broker?
Life insurance agents essentially work in a retail capacity and represent the insurance companies. They are often bound to one carrier and are not able to provide as many options.
Life insurance brokers work as wholesale distributors and represent the consumer, not the insurance company. They have access to the full market and can work on their clients’ behalf to pinpoint more options than the typical agent,
How much life insurance coverage should you have?
Often, clients do not realize how much coverage they need or assume that their group coverage is enough. Coverage depends on several factors, and nine times out of ten, it will be a loftier amount than expected. Carriers will ultimately determine the maximum they are willing to insure you for based on the type of coverage needed. Whether it be personal coverage such as income replacement, or estate planning, or business coverage such as buy-sell agreement or key person coverage. The best life insurance brokers will walk through these factors with you to find the best solution and coverage to fit your needs.
Is it possible to combine different types of life insurance policies?
Yes, you can combine products to better meet the goals of the client.