As an insurance agent, I feel a sense of duty to combat misinformation in my field of study. I would say at least 90% of life insurance articles on the internet are oversimplified at best, and misinformation at worst. So I was pleasantly surprised when I found a good article. Most points I agree with, but there are some minor points that I don’t agree with.
The author spends some time letting people know how to check the credentials of an insurance agent. Checking credentials isn’t what I call normal behavior. For instance, I don’t ask real estate agents to show me their license. Likewise, I don’t ask doctors for their medical license. However, the paranoid individual is always welcome to check. I believe every state’s department of insurance has their own website providing agent license information and the companies an agent represents (here is the Texas website for agent credentials). Another reason for not worrying about an agent’s credentials is that every agent goes through background checks for every company they represent. If an agent has anything more than a minor traffic violation, that agent could miss the opportunity to write business for an insurance company. Insurance companies also don’t like agents with bad credit, but that has more to do with an agent’s ability to repay unearned commission.
The author mentions time pressure as a red flag. There are some good reasons why agents put time pressure on potential clients. One reason has to do with the old saying, “Time is money.” Some agents have to make a two hour drive to a potential client’s house (that’s a four hour round trip). Asking an agent to make a second trip isn’t being respectful of the agent’s time. Another reason for the time pressure is that some clients are chronic procrastinators. Many clients that I see have gone 60 or 70 years of their life without buying life insurance. They have successfully found ways to rationalize not getting insurance for all those years. Allowing a client like that to find more ways of delaying an insurance purchase is unethical. The agent has an ethical duty to push a little in order to get clients to do what is in their best interest. Medical doctors put the same pressure on their patients. However, if an agent is routinely using high pressure tactics, that usually means the agent is doing a poor job educating the client. The need for high pressure tactics seems to disappear when a client is properly educated. High pressure tactics also come with buyer’s remorse, which isn’t good for the client or the agent.