Q. How can I get life insurance?
A. About 1, 700 companies in the United States sell life insurance. While some consumers prefer to buy policies directly from a company, most people buy life insurance through agents or brokers.
Before purchasing a policy, check the company’s financial condition. Ask an agent or request information from your state’s insurance department. Contact the insurance department to be sure the company is licensed in your state. You can also check the financial health of a company by looking at its “rating.” A number of services rate the financial strength of companies, and publications that list these ratings usually can be found in large public or business libraries.
Collect the names of several agents through recommendations from friends, family and other sources. Find out:
Is the agent licensed in your state? All states require agents to be licensed to sell life insurance. In addition, agents who sell variable products must be registered with the National Association of Securities Dealers and have additional state licenses.
What company or companies does the agent represent? Ask the agent which company he or she represents and what types of policies these companies sell.
Does the agent have any professional designations? Professional designations that life insurance agents may earn include Chartered Life Underwriter (CLU) and Life Underwriter Training Council Fellow (LUTCF). Agents who are also financial planners may have other designations, such as Chartered Financial Consultant (ChFC), Certified Financial Planner (CFP), or Member of The Registry of Financial Planning Practitioners.
Is the agent a member of a professional organization? The major association for agents is the National Association of Life Underwriters (NALU). NALU’s local associations provide educational seminars and help update agents on trends. Similar training and services for financial planners are available through the American Society of CLU & ChFC, Institute of Certified Financial Planners (ICFP), and International Association for Financial Planning (IAFP).