How can you find the right broker?
You want to choose a trustworthy, knowledgeable professional with extensive experience in the field. Here are a few suggestions for finding such a person:
What is a life insurance broker?
Ways a broker can help you buy life insurance and how to find the right one for your needs.
Even if you’ve already decided to buy life insurance, you may still have a lot of questions: How much coverage do you need? Should you get term or permanent life insurance? If you need permanent, should it be whole life insurance or universal life? What should you expect to pay?
If you're purchasing life insurance for the first time, you probably don't know most of the answers. But that's ok – you don't have to go it alone. A life insurance broker can help you to better understand the ins and outs of life insurance and, more importantly, help you to find the best possible policy for your specific circumstances and needs. This article will help you understand:
What a life insurance broker does
Deciding if you need a broker
How a broker's guidance can help
Tips for finding the right broker
What does a life insurance broker do?
A life insurance broker is an independent insurance salesperson who offers policies from multiple life insurance companies. Experienced brokers have in-depth knowledge of many different insurance products and can offer their clients a wide range of options. A competent, trustworthy insurance broker will:
Work to understand your needs, circumstances, and financial situation and then recommend the life insurance policies that meet them.
Explain and clarify the differences between policies – including term life, universal life, and whole life insurance – so that you can make an informed decision.
Walk you through the buying process and help you to compare rates.
Help with the application process, ensuring that all necessary paperwork is completed accurately and efficiently.
Continue to offer support even after the policy is in effect, helping you with any policy changes, claims, or inquiries that may arise.
By offering personalized service and comprehensive guidance, brokers can help to ensure that you purchase the best possible policy for your needs. And, they can help you make any necessary changes to your coverage as your needs change in the future.
How brokers are paid
Brokers earn commissions from the life insurance carriers for each policy they sell, which may add somewhat to the cost of a policy. Conversely, you may be able to save a bit by getting an online life insurance quote and buying directly from an insurance company. However, if you’re not sure exactly what you need, you may end up with the wrong policy, negating the value of the savings.
Brokers, agents, and financial professionals aren’t the same thing
Brokers, agents, and financial professionals are not the same thingWhile the terms may be used interchangeably, there are important differences between them. A life insurance broker usually represents multiple life insurance companies and can offer you policies from all of them. A life insurance agent usually works for one specific insurer, and while they can only offer policies from that company, they may have a deeper understanding of the features and provisions of those policies. Financial professional is a broader term, and typically refers to any person licensed to sell financial and investment products such as insurance and securities (e.g., stocks and bonds). While some financial professionals may not have the specific licensing needed to sell life insurance, all Guardian Financial Professionals do.
What questions will a life insurance broker answer?
A life insurance broker is a licensed professional with deep training and real-world experience. They know what types of questions to ask and are practiced listeners who will learn about your situation, answer your questions, and explain things like:
The difference between term and permanent life insurance
A term life insurance policy provides death benefit coverage for a specific period of time, typically between 10 and 30 years, and there’s no cash value component – it’s designed purely to give your beneficiaries a payout if you die during the term. Permanent life insurance policies – whole or universal life insurance – differ from term life because they're designed to last your entire life, and policies include an asset-building "cash value" component: A portion of your premium dollars can grow in a tax-efficient way.1,2,3The different ways you can use life insurance
All life insurance pays a death benefit that can help protect your family’s finances if you pass away. However, the cash value component of a permanent life insurance policy provides additional benefits you can use while you're still alive: you can borrow money against it, use it to pay your premiums, surrender it for cash to help fund your retirement, or even use it as an estate planning tool.4Optional provisions you should consider
Life insurance companies offer optional riders that can provide a lot of added value for minimal added cost.5 However, it can be hard to know which ones are relevant to your needs unless you talk to a life insurance brokerage professional.How much coverage you need – and for how long
There are useful rules of thumb for estimating your coverage needs, but they’re just that: estimates which don’t take your unique personal situation into account. A good broker will help you understand your true protection requirements, helping to make sure you only pay for what you need.Getting coverage if you have medical issues
If you've been diagnosed with a medical condition and worry about qualifying, a good broker may be able to help you find term or even permanent life insurance – especially if your condition is well-managed (for example, Guardian can issue policies to people with AIDS, but many other life insurance companies won’t).
There’s a lot to know about buying life insurance. Licensed insurance brokers have experience that can help you save time and effort by pointing you to the policies and options that are most relevant to your needs.
Do you need a life insurance broker?
While a broker will be an essential resource for many individuals, some people may choose to navigate the policy purchase process on their own. To find out what’s right for you, consider these questions:
Have you bought life insurance before?
Do you know about the different kinds of policies and what they do?
Do you only need protection for a limited number of years?
Do you know how much coverage you need?
If you’re under 40, relatively healthy, and you answered “Yes” to each of these questions, you may not need professional help. Because you probably know what you want: a term life insurance policy with a specific death benefit that lasts for a specific number of years. You probably also know that it’s easy to shop and compare term life insurance policies online – for example, you can use the Guardian life insurance calculator to get a term life insurance quote in under a minute. On the other hand, if you answered “No” or “Not sure” to any of the above, it may be a good idea to talk with a broker about your life insurance needs.
Ask a friend or family member for a referral
Mention to a family member or friend that you're thinking about getting life insurance and ask if they know someone who can help. Find out how they worked with that broker and if they were satisfied. A review from someone you know is always best, and because you have a relationship with one of their existing customers, the broker will have an incentive to work even harder on your behalf.
Look at online broker reviews
This is easy to do, but you'll need to approach what's posted with a grain of salt. It's hard to know which online reviews are honest and which are not, and top-line star ratings lack helpful detail. If there's a review site you already know and trust – and that site rates insurance professionals – start there.
Find out about broker credentials
If you’ve narrowed your search down to a few prospects, ask about their credentials before making your choice. Licensed insurance professionals get additional certifications and training that can be a good indicator of dedication and experience. There are also well-known professional associations, such as the National Association of Insurance and Financial Advisors (NAIFA), that require members to follow a strict code of ethics.
Ask Guardian
Guardian offers life insurance policies through both brokers and financial professionals who are able to address a broad range of financial needs. If you’d like to speak with someone about life insurance right now, Guardian can put you in touch with a professional who will listen to your needs, tell you about the kinds of policies that are most relevant, and provide a quote. To find someone near you, just fill in your zip code and click below.
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This article is for informational purposes only. Guardian may not offer all products discussed. Please consult with a financial professional to understand what life insurance products are available for sale.
1 All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims paying ability of the issuing insurance company. Policy loans and withdrawals affect the guarantees by reducing the policy’s death benefit and cash values.
2 Some whole life polices do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial professional and refer to your individual whole life policy illustration for more information.
3 Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
4 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.
5 Riders may incur an additional cost or premium. Riders may not be available in all states.