The colossal risk of buying life insurance without an agent
March 1, 2018 by Stephen C. Burgess
More and more life insurance companies are selling their policies online these days.
To a buyer, this approach has the appearance of being easy. He or she can open a web page and apply directly with the insurer. Some insurers entice with statements that imply an easy process, such as; “Everyone gets coverage,” or “For only $1 you’re insured.”
Even though the cost of a policy bought direct from the carrier online is exactly the same as if the policyholder bought it through an agent, to many people there’s the perception that they’re saving money by working directly with an insurer because in their mind they are cutting out the “middleman.” But these people are running a colossal risk by not using a life insurance agent.
In this day and age of everyone trying to disrupt old business models, the traditional method of selling life insurance – from an agent to a buyer – may not be in fashion. But in this same day and age, when disruption equates to eliminating qualified counseling and advice for the sake of profit to the business, buying life insurance from an agent may be more important than ever.
A good agent will explain all the features of a life insurance policy. A good agent will explain how policy riders work and why one or more should be considered. A good agent will talk to a buyer about the various types of policies and why one is more suitable than another for their circumstances. Many online life insurance policies are term insurance. If someone is buying term life insurance, they may think that the only thing to consider is the price. A good agent won’t limit their counseling simply to price.
For each of these reasons, and many more, the value of having a licensed life insurance professional lead a buyer through the process of understanding the policy features cannot be overstated. But, after speaking with hundreds of beneficiaries of denied life insurance claims, it’s obvious that agents bring an even bigger value to buyers than just explaining policy features.
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