Why you need a life insurance agent

Information courtesy of USAA Life Insurance Company and USAA Life Insurance Company of New York

What does a life insurance agent do?

As a licensed professional, a life insurance agent works to help individuals and families find the right life insurance products for their needs. They work for insurance companies or as independent contractors. And they're paid to help consumers by selling life insurance policies.

Because this isn't the most riveting topic, life insurance professionals are there to help educate you. They're helpful because they typically have extensive knowledge on all the types of coverage, including term life, permanent life, and associated riders and benefits.

In addition, life insurance agents can:

Assess your specific life insurance needs.

When you're buying life insurance, an agent will ask you questions about your financial situation, family situation and future goals to determine how much coverage is necessary.

They also have access to industry-specific resources and tools and have a solid understanding of the underwriting process. Therefore, they can give you a more customized quote than you might find from a generic online service.

The result is a savings in time and money as well as a product that's more likely to meet your needs.

Present viable options.

There's no one-size-fits-all approach for life insurance. A professional can narrow your options and help you understand the differences between each one so that when you make a decision, you're comparing apples to apples.

Provide up-to-date knowledge in a complex industry.

Navigating the complex world of life insurance can be time-consuming and frustrating. Plus, after having conducted a lot of research, you may not feel confident you've seen all the options available to you.

Not only can a life insurance agent provide expert guidance on the different types of life insurance policies, but they also have a pulse on new options available in the industry. After you make a decision together, they'll take care of the paperwork so you don't have to worry about making costly mistakes.

Assist in the application process.

Because it can take weeks to apply and to get approved for life insurance, it's nice to have someone in your corner who can answer questions or make any necessary adjustments.

In addition to filling out the paperwork, a life insurance agent can be your liaison during the various stages of the application.

Provide ongoing policy support.

Once the policy is in place, a life insurance agent can provide ongoing support. Throughout the life of your policy, you may need help making beneficiary changes and reviewing your policy to ensure it remains up-to-date.

Advocate for you and your family.

Should your life insurance needs change, an agent can tailor their recommendations to your needs and goals. In the event of a death, it's reassuring to know you have a professional who will be there to help your beneficiaries through the difficult claims process.

How to find a life insurance professional

If you've decided to buy life insurance through an agent, there are two common options:

• You can work with an independent life insurance agent who gets paid on commission.
• You can work with an agent who represents a large life insurance company.

Both options have advantages and disadvantages. The right choice depends on your individual needs and preferences.

Independent life insurance agent on commission

In most cases, independent life insurance agents aren't affiliated with a specific life insurance company. They work on commission and get paid a percentage of the premiums you pay.

For that reason, they're usually free to offer policies from multiple life insurance companies and can shop around to find the best coverage and rates.

Advantages of working with an independent life insurance agent:

• More options. Independent life insurance agents offer policies from multiple life insurance companies, giving more options and flexibility.
• Personalized services. Independent life insurance agents provide personalize service tailored to your specific needs and goals.
• Transparency. Independent life insurance agents are not tied to any specific life insurance company, which means they are likely to be transparent about the pros and cons of different policies.

Disadvantages of working with an independent life insurance agent:

• Lack of brand recognition. Independent life insurance agents may not have the same brand recognition as large life insurance companies. This can cause concern about the financial strength of the company presented.
• Limited resources. Independent life insurance agents may not have access to the same resources and team support as agents who work for large life insurance companies.
• Monetary bias. Because independent agents are compensated on commission, they may have a bias toward companies with better commission offerings.

Agent who represents a large life insurance company

Agents who represent large life insurance companies typically are paid a salary or commission for the policies they sell. Therefore, they can usually only offer policies from the company or affiliates they represent.

Advantages of working with an agent who represents a large life insurance company:

• Brand recognition. Usually, large life insurance companies offer well-known and trusted brands, which can provide financial strength — and peace of mind for the buyer.
• Resources and support. Agents who work for large life insurance companies have access to a wide range of resources and support, including marketing material, training, tools and customer service.

Disadvantages of working with an agent who represents a large life insurance company:

• Limited options. Agents who work for large life insurance companies can only offer policies from the company or affiliates they represent, which sometimes limits the options.
• Potential bias. Agents who work for large life insurance companies may be biased toward the policies offered by their company and may have blind spots to other choices better suited for their clients' needs.

Here's the bottom line: A life insurance agent can save you time and provide expert guidance, personalized service and ongoing support throughout the life of your policy.

If you're in the market for life insurance, consider working with a licensed life insurance agent to help you find the right coverage for your needs.