going through the questions and answers
surrounding which life insurance plan to
quote and purchase, many clients
inevitably get to the question, "And how
are you paid". It's sometimes
delivered sheepishly or with a hint of
suspicion but we feel it's important to
give you the full detail. We
really do want this to be a relationship
and part of that relationship is an
understanding of how life insurance
agents get paid.
short answer is that we (being
independent life insurance agents) get a commission
when a policy goes into effect.
The main take away for you as the
purchaser of term insurance is that your
rate will be absolutely identical
whether you go through us, another
agent/broker, or directly with the
carrier. This is very important
and usually leads to the question of how
we get paid in the first place.
There is no fee for our service.
PERIOD. Think of us as travel
agents. We do get a commission
from the carrier when a person pays for
his/her approved policy but it doesn't
affect the rate they will pay. If
you go direct to the carrier, you will
pay the exact same rate. Some
agents work directly for a carrier which
means they are not independent.
They can only really show you that
carrier's insurance products. We
are independent which allows us to shop
nearly the entire market on your behalf.
Another important point which hopefully
sheds light on where our interest lie is
how much that commission is. The
commission is pretty comparable from
carrier to carrier so there's no real
advantage to going one direction or
another. The commission does vary
with the size of the policy and is based
on the amount of premium. Life
insurance commission tend to be paid
quite a bit for the first year and then
very little if any on the remaining
years. Let's get back to the
"based on amount of premium" above.
You'll notice that we're big fans of
term life insurance (with dozens of
pages across this website to prove it).
One of the reasons we're big fans (and
also customers without sounding like a
popular toupee commercial) is that it is
so affordable. We think it makes
the most sense financially for most life
insurance needs. We could
probably make a lot more commission in
whole life insurance or other variations
of that product but we don't feel they
make the most sense for our clients, not
to mention ourselves. We're
a little leery of life insurance agents
pitching and pushing other types of
insurance that can be 10 times more
expensive than term insurance available
right here on this site. Maybe,
there's an advantage but I would need to
be convinced that the advantage is for
the client (and not the broker and/or
the net take away is that we would
probably be selling other types of life
insurance if our primary motive was to
maximize commission. Term life can
be extremely inexpensive which is why it
makes so much sense and also why some
agents avoid it. Not us.
What exactly do we do for the commission
we earn? We're glad you asked.
help our clients through the entire life
cycle of the term policy. First,
we provide multiple strong carriers up
front to quote against each other so
that you can find the best rate.
We can get your application started with
a 10 minute phone call with one of our
agents. We track the process
through underwriting to make sure your
application moves through smoothly.
We assist with the entire issuing and
receipt process to make sure your policy
does not lapse before it's in place.
Finally, we continue to be a point of
contact throughout the life of the
term life policy to investigate options, rates,
and changes that may benefit you as the
policy holder. You are essentially
receiving a trusted third party at no
additional cost to you. It's nice
to have someone on your side when
dealing with the large life insurance
companies and the many different options
available on the
term insurance market.