Five Essential Questions to Ask A Life Insurance Agent
A how-to guide for uncovering if a life insurance agent is working for you or simply trying to convert a sale
One of the fundamental reasons we are building Optifino and revolutionizing life insurance is because time and time again we have heard horror stories about agents. While we know the vast majority of agents mean well, the reality is that many make recommendations that do not fit the goals of clients or create expectations that are unrealistic. This happens for a variety of reasons, but just to name a few: the product marketplace is too analog to make streamlined comparisons against the millions of product permutations, nearly 50% of the sales force remains captive or preferential to specific carriers, many agents show bias towards certain products when making recommendations, not enough life insurance product training and financial education for agents, and carriers are always introducing new products to capture new niches. Even the savviest agents lack the time and resources to understand the entire marketplace and how to tailor a policy to align with goals.
That's why it's crucial to be able to evaluate the trustworthiness and expertise of the agent providing the policy recommendation(s). Because we believe tailored permanent life insurance to be one of the most powerful and resilient assets to own before any other, we aim to equip everybody with the knowledge of the right questions to ask and why—whether you work with us or not. We will explore five essential questions you should ask a life insurance agent when considering whether to work with them. These questions are designed to reveal the agent's true intentions, ensure they have your best interests at heart, and help you make a well-informed decision about your life insurance needs.
How do you determine which type of life insurance policy is best for your client’s unique financial situation and goals?
We need to uncover how they tailor policies, specifically if their process is entirely analog or whether they use any technology. This question forces the agent to explain their decision-making process and whether they tailor their recommendations based on individual needs—rather than promoting one-size-fits-all solutions. Many agents favor Whole Life policies because of the guaranteed death benefit and the influence of Nelson Nash—a finance expert and follower of the Austrian school of economics who coined the Infinite Banking Concept (IBC) in the 1980s. During the ZIRP era of the 2010s, the many agents showed a bias towards IUL policy, which left many policyholders too exposed to the market (especially as their goals evolved and they sought financial protection) or with a likelihood of lapsing (especially since it had been getting lower cap rates). Ultimately, we need to ensure the agent is considering the client’s broader financial picture and future needs, rather than just focusing on the sale.
What are the potential downsides or risks associated with the life insurance policy you’re recommending?
This question is designed to uncover agent transparency or lack thereof. Across the policy spectrum, there are tradeoffs with every type of permanent life insurance product since they are designed to cater to specific goals, life stages, and risk tolerance. If an agent believes there are no drawbacks in the policy, then they are either trying to push a sale that does not align with your goals or they are misinformed and lack the proper education to be making said recommendation. This is what led to many of the IUL recommendations mentioned before, since many agents assumed the market would always go up and did not account for market volatility or the changing cap rates written in the fine print of those policies. A good measure for their honesty is if they can explain, in layman’s terms, why other policies were not recommended.
Can you provide a comparison of the policy you’re recommending with other policy types or similar policies from other carriers?
We want to identify whether they are selling one product or one carrier because they are biased towards one product or carrier, or if they are truly leaning into the spectrum of life insurance products based on a client’s goals. This question challenges the agent to justify their recommendation with a broader market perspective, demonstrating their commitment to finding the best fit for the client. When nearly 50% of the agent salesforce is captive, you must ensure the agent is disclosing any kind of incentives or preferential treatment the agent receives from specific carriers. Premiums can vary as much as 60% for the same product across carriers, so if the agent is not independent, policyholders risk overpaying and even working against their goals. This question aims to uncover potential conflicts of interest or shortcuts taken to lead to a faster recommendation at the expense of the client.
How often will you review my policy to ensure it continues to meet my needs, and what does that review process look like?
The goal here is to establish the standard of aftercare they provide to their clients. Aftercare is largely absent from the industry, with many agents never looking at the performance of the policy after the policy is taken out. With an aging workforce, more policies are becoming orphaned—meaning the agent is no longer in the agent workforce—as older agents retire. Estimates are that between 40 and 70% of life insurance policies are orphaned and between 20% to 40% percent of agents are within 10 years of retiring or selling their practices (LIMRA-McKinsey Financial Advisor Survey), meaning all current policyholders would benefit from having their policy professionally reviewed. According to JD Power, overall policyholder satisfaction deteriorates the longer they hold a policy, specifically at the 10-year and 20-year mark, since goals evolve and policyholders are unsure it’s still contributing to their goals. We use both our proprietary technology and Wealth Architect experts to professionally review our client’s policies every year, ensuring it is always aligned with their goals and that the policy is never orphaned.
What is your experience and track record in helping clients achieve their financial and insurance goals? Can you provide references or testimonials?
Given the fact that most licensed agents spend less than a year in the industry, there are many agents without the experience or track record to tailor the policy towards your goals. While their experience and track record alone should not be enough to discredit the recommendation, when taken in tandem with the other questions, this is the cherry on top. This question helps a potential client gauge the credibility of the recommendation, especially if the recommendation is made without the likes of a policy tailoring platform like Optifino. If the agent is more novice and unable to provide the testimonials, they should have references from those who trained them—certifying their knowledge and education. Consider the networks and communities that more novice agents operate in, and judge for yourself if they truly love this Swiss army knife of an asset or if they’re merely trying to convert a sale.
We built our platform to address all of the questions above and create renewed understanding and excitement around an asset that is the foundation of a holistic financial strategy—a versatile asset that can act like a supercharged savings account. Whether you want to work with us or not, we simply hope to equip you with the questions to approach a conversation with an agent with confidence. Choosing a life insurance policy isn't just about finding the lowest premium or the most attractive benefits; it's about finding an agent who genuinely understands your needs and is committed to helping you achieve your goals—from spending your waning days fishing eight ours a day to creating a college fund for your newborn. A good life insurance agent will welcome these questions and provide transparent, thoughtful answers that reflect their dedication to your well-being. We love this asset class and we want you to know what you’re buying. Don’t settle for anything less than you deserve. Your future depends on it.