What Should Your Insurance Agent Do for You?
While the internet has made it possible to request quotes online from a variety of reputable insurance companies, not everyone wants to spend mind-numbing hours filling out web forms. Instead, a better use of time may be to provide detailed information to an insurance agent and let a professional do the legwork.
However, not all insurance agents are created equal. "A lot of people in the insurance business sell a product and never talk to [their customers] again," says Daniel Hochler, financial representative at Forest Hills Financial Group in New York City.
That's not the mark of a good agent, according to industry experts. A standout agent will offer personalized attention throughout the buying process as well as regular check-ins once a policy is established.
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Start with the right agent. You need to understand your agent's job before you know what he or she can do for you.
Noel Evans, an independent long-term care specialist with insurance agency Lifetime Solutions Plus LLC in Virginia Beach, Virginia, says agents typically fall into two groups. There are agents who sell property and casualty insurance, such as auto and homeowners policies, and those who focus on life and health products.
Consumers who are buying a more specialized type of insurance product may want to look for an agent who has extensive experience with that product. Evans says long-term care insurance is one example of a product that not all agents are qualified to sell. "Unless you really specialize in it, it's going to be really hard to understand it," he says.
Beyond finding an agent who is well-versed in the type of insurance you need, consumers also need to decide whether to work with an independent agent or a captive agent. Independent agents sell policies for a variety of companies, while captive agents work exclusively with a specific insurer.
"If you call Geico or Allstate, they are only going to talk about Geico or Allstate products," Hochler says. The same is true of captive agents. They only provide information about the company they represent.
Gage Kemsley, vice president of Oxford Wealth Advisors in Rio Rancho, New Mexico, argues that independent agents are the best bet for consumers. "It's important to see the whole world of insurance products out there," he says.
With that said, if you're loyal to a specific company, captive agents could be beneficial since they may have greater familiarity with available products.
Understand the buying process. Once an agent has been selected, he or she should gather information such as demographic details and health history that's required for quotes. Then, an agent must prepare his or her client for the buying process.
"The No. 1 thing an agent should do right from the beginning is to explain the process," says Craig Simms, senior vice president and chief marketing officer for Vantis Life Insurance Company. According to Simms, many people withdraw life insurance applications after they realize a medical exam is required. These withdrawals might be avoided if agents told customers upfront what will be required to complete the purchase process.
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An agent may also request information on other insurance policies that a customer holds, including those provided through a workplace benefits package. This information allows them to ensure any new coverage will supplement existing plans.
Once insurance quotes are received, customers should expect that an agent will be able to review not only the price, but also point out any benefits or drawbacks of specific policy provisions. For example, customers should be able to review deductibles, copay requirements and any exclusions to the type of claims covered. When a plan is selected, agents can make arrangements for payment and other details needed to begin coverage.
Expect yearly check-ins. While agents do the bulk of their work during the buying process, they shouldn't disappear after a sale. "The biggest weakness of most insurance agencies is that they don't communicate with their clients enough," Kemsley says.
At the very least, insurance agents should be corresponding with their clients once a year to confirm coverage details are correct and that a person's insurance needs have not changed. For example, divorce, death or the birth of a child may necessitate changes to life, disability and health insurance. Meanwhile, home renovations or the payoff of a vehicle loan may impact property and casualty policies.
While a yearly checkup is the minimum, some professionals exceed this expectation. "In a perfect world, every agent should be reaching out to their clients multiple times a year," Evans says. They may send cards at birthdays or the holidays or mail quarterly newsletters in addition to making a more personal contact when a policy renews.
Some agents go above and beyond. Some insurance agents go the extra mile when it comes to providing additional services to their clients. Most commonly, agents may connect their customers to trusted attorneys, accountants or financial planners.
"Referring your customers to other professionals when you can't help them is an added value," Simms says. For clients, this type of service is not only convenient, but can also be a simple way to find trusted services. Agents may proactively offer referrals, but even if they don't, clients can often request recommendations.
"I've done the legwork," Hochler says. He doesn't take referrals lightly and strives to make sure he is only sending his clients to the best professionals. "I've met 200 attorneys, and there are seven or eight I feel comfortable introducing my clients to."
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Other insurance agents might hold annual parties for their best clients or host educational seminars on insurance or finance topics. While all these perks are added benefits, keep in mind they are just a bonus to having a trustworthy and competent agent who will ensure you have appropriate coverage year after year.
