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What Does a Life Insurance Agent Do?

Working as a life insurance agent involves gathering information and advising clients about their life insurance needs.
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  • Written By: Cassie L. Damewood
  • Edited By: Jenn Walker
  • Last Modified Date: 20 August 2014
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A life insurance agent markets and sells insurance that pays beneficiaries a lump sum of money when the policyholder dies. A person in this position may work for one company or as an independent agent, selling insurance for multiple companies. Agents may sell policies solely to individuals or companies or equally serve both sectors. The agent is commonly expected to be knowledgeable about a variety of plans and options to assist her customers in purchasing insurance products that suits their needs.

Her customers frequently purchase other types of insurance from her, as buying multiple plans from the same company often saves money on total monthly premium payments. These insurance options often include fire, home and casualty coverage. Health insurance is also generally available from a life insurance agent. Some agents are licensed to sell securities and other financial products as well.

A customer who has expressed interest in buying life insurance is regularly asked to complete a questionnaire by the insurance agent. The questions usually focus on family health history, personal health history and lifestyle habits. This assessment helps the agent make sound recommendations on what plan is best for the customer.

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It is customary for the life insurance agent to require the insurance purchaser to undergo a physical examination by a physician or health care facility chosen by the insurance company. This health review is generally considered superior to information provided by the customer’s family physician, as the chance for bias is normally believed to be virtually eliminated. Undiagnosed chronic conditions or proclivities for future health problems often significantly affect the monetary premium the insured person pays.

When a life insurance agent presents the different policy options, she traditionally explains them in simple terms to help the customer fully understand the policy. The highlights of the explanation ordinarily focus on monthly premium payments, policy exceptions and the amount of money paid to the beneficiaries. A competent agent is commonly expected to be able to answer most questions about her products.

A successful life insurance agent typically has great communication skills and a comforting demeanor. Being able to put people at ease is important when attempting to sell them a product that will only be valuable after their demise. The ability to clearly explain the intricacies of premiums and exclusions also generally attracts and retains a solid client base.

A college degree is normally required to be considered for a position as a life insurance agent. A concentration of studies in statistics, economics or business administration is desirable. A license issued by a local or regional agency is normally required to work in this profession.

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anon180937
Post 5

I am a life insurance agent for New York Life and I am very surprised at how confused some of you are. The purpose of Life insurance is simply to cover someone's life.

Green Weaver, the reason there is life insurance for seniors is they too have debts, ex: funeral costs, home, cars, bills, etc. If the senior does not want to leave his or her family with all these debts, they purchase life insurance. Senior life insurance is very expensive because a senior is a higher risk. Children's life insurance is used for two very important reasons. One is to lock in the child's health. the other is to lock in the child's age. You see life insurance premium is based on those two factors, age and health. The older you are or unhealthy, the more expensive it is.

Moldova, you are correct. A whole life policy is a better place to put your money in rather than a CD, but in no means should a life policy be used as a primary means of investing. The reason why people invest in whole life policies is to supplement or as a back up plan to their stock market investments. The purpose of having both is in case there is a market crash, all the money is not lost because they also saved money in their whole life policies. Annuities are not only used for retirement. If you put a lump sum, you can start receiving payments whenever you want. You don't have to wait to retire.

Mutsy, term insurance is a great *temporary* alternative. People usually purchase term insurance when that is all they can afford to get. Most common are young families who have not started their careers yet. The reason why term is a temporary fix is because it covers you for a certain amount of time. If you get a five year term, your premium will stay locked in for five years. A 20 year term will stay locked in at the price for 20 years but at the end of the term, the price will go up to what it would be for whatever age you are at that time.

Let's say you purchased a 20 year term at age 30, when you are 50, the term will be up to the insurance company will now charge you a premium of a 50 year old instead of a 30 year old, which, by the way, is a lot higher, and will continue to go up every year after that.

Now you should be asking the agents you've met with these questions. Life insurance is a very important purchase and should come with lots of background research. you should always research all the companies you come across with. Checking their ratings, and simple searches on that company will not suffice. You always have to be careful where you put your money in, so take the time to do in depth research.

GreenWeaver
Post 4

@Moldova - Wow, I didn’t know that. I wanted to find a life insurance agent but I am afraid they will try to sell me something that I don’t need. Someone told me that there are a couple of companies online that will give you preliminary rate quotes from a variety of insurance companies so that you can narrow down your choices and work with an agent that offers the best rates.

I know that I am looking for a term life insurance policy for about a 20 year term so I am going to take a look. What I don’t understand is why they have life insurance policies for children. Isn’t the reason for life insurance based on the fact that you are dependent on the income of someone that could pass away?

I also don't understand the need for life insurance for seniors. It is very expensive and again unless the seniors were still working and dependent on one another’s income for survival, I don’t see the need for life insurance for seniors either.

I know some people may disagree, but it just my opinion. I guess you have to be really focused when you talk with a life insurance agent and understand what your goals are when you go in. I think if you do your own research it might help the insurance agent focus on what you need and not try to offer you additional products that may not work for you.

Moldova
Post 3

@Sunny27 -I agree that a lot of financial advisors suggest that insurance not be put into the same category as an investment because the purposes of the two are completely different. For example, a life insurance annuity is an investment made through an insurance company. They will offer you a guaranteed rate for the first two years of the term and tell you what the minimum interest rate would be.

They can also offer you hypothetical’s that will tell you how your money might perform based on the data that they are offering you. You will get a guaranteed sum every month and a lot of people get these when they want a higher return on their cash savings and want to earn a little more than what a CD offers.

The thing to remember with annuities is that they are used for retirement purposes so if you do not renew your annuity and pull the money out before retirement you have to pay tax penalties. I looked into annuities as an investment and decided to look at other options. Life insurance agents can sell you a lot of different products like these, but you need to really understand them and not feel pressured to invest.

Sunny27
Post 2

@Mutsy - I agree with you. There are also surrender charges, and the cash value is a fraction of what you would normally get had you invested the same amount in the stock market over the years.

I heard many famous financial advisors say that insurance is supposed to be to protect you if you are dependent on the income of your spouse or partner and should not used as an investment.

mutsy
Post 1

I remember when my husband was looking for a life insurance policy he found an agent that talked to him about universal life insurance which offers a cash value at the end of the policy.

He told me about it but I had heard that term life insurance was a better policy because it was a lot cheaper. For example, with a universal life insurance policy my husband would have had to pay out about $600 a month, while with a term policy he only had to pay $60 a month for the same coverage.

The only thing is that with a term policy there is no cash value. These two life insurance types are really the most common, but an independent life insurance agent will usually only mention the universal life insurance because they stand to make a lot of money in commissions.

I told him that we should look at term insurance on our own and that is what we did.

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