🚩Is Your Life Insurance Agent Scamming You? Watch Out For These 3 Red Flags!
Commission compensation to life insurance agents can result in unnecessary products being pushed on you—here are three signs it is happening and what to do next.
Life insurance is not my favorite thing to talk about, but a comprehensive financial plan requires you consider the worst-case scenario of providing for your family if yourself or your spouse pass away unexpectedly.
It is not just the topic of life insurance I find distasteful, it’s also the multitude of unscrupulous insurance agents pushing expensive products on unknowing victims. Of course, not all people selling life insurance are loathsome, but—much like the legal industry—it is a higher percentage than the general population.
Regardless of how you obtain it and who you purchase it from, you may need life insurance coverage, but before you go out and shop, or buy from that salesperson who just rubs you the wrong way, consider these three red flags that just maybe your gut is right:
🚩#1: They are using pressure tactics to induce you into buying the product.
If the agent is using high-pressure sales tactics to coerce you into making a purchase quickly—this is a major warning sign. A reputable agent will provide you the information you need and give you time to make an informed decision.
Pressure tactics can include:
Fear mongering. If they are listing all these terrible awful things that may happen to you, your family, or your finances if you do not buy their product, you have a fear mongerer. You already know you’re going to die, and are shopping for life insurance; you don’t need your agent to pile on.
Aggressive follow-ups. If you are hearing from them more than you hear from your spouse or kids, or boss, then this agent needs to go. You have already been proposed their product; contacting you ad nauseum through phone, text, or email is just an attempt to bamboozle you into purchasing this product.
Targeting you at a vulnerable time. If you have just experienced a significant life change such as the death of a loved one, divorce, a health crisis, or a financial setback and they seem to be dwelling on this vulnerability in their sales process, take a pause. I recommend not making any major decisions for about six months after a significant life change.
🚩#2: Their knowledge about the product or you, the client, is limited.
If, while you are interacting with your agent, they are unable to answer basic questions, or seem unsure about the products they are offering, it may indicate either they lack expertise in their product or they are avoiding answering you because they know the product is not in your best interest. Either option is a reason to ditch this agent.
Secondly, be very cautious if an agent tries to push a particular insurance product without fully understanding your financial situation, goals, and needs. Life insurance needs are specific to your individual situation; if an agent is pitching you a solution without knowing your problem, get a new agent.
🚩#3: Missing information and/or disclosures.
This one can be a little tricky if you are not in the industry and able to identify what is required to be provided prior to purchasing an insurance product. But generally, if the policy terms, costs, fees, and potential risks are vague to you, it is not transparent enough.
Additionally, review any document provided to you to be sure all pages are included. I have seen countless illustrations provided to clients with missing pages.
What To Do if Your Agent Is a Scammer but You Still Need Coverage
If upon reviewing this list you realize you probably are being scammed, here is what you need to do.
First, politely, in writing, contact the agent and clearly explain you are not interested in their product or in any further contact from them or their office. But be ready: scammers may take a few times to observe your request, especially if they are acquaintances of some kind.
Secondly, get an opinion from a fee-only Certified Financial Planner®. A financial plan will include a recommendation on how much life insurance coverage you need and will also recommendations on what products are ideal for your needs. The great thing about hiring someone to make a clear, unbiased recommendation is they are not relying on any commissions for their compensation.
Finally, if a financial planner is outside your budget, or desire at the moment, utilize an online insurance provider such as mypolicygenius.com (not an endorsement), and shop for a 20-year policy worth 5-10X your salary. At some point though, it will be important to fine tune how much you really need and for how long.
Rural Village Life Lately
I took some time away a couple weeks back to visit Charleston, South Carolina for a 40th birthday celebration of a dear friend. It was a wonderful break from the North Country winter that never ended! We have been to Charleston many times, so this time we went out to Mount Pleasant and Shem Creek to see the more local flavor. Of all the southern cities I’ve visited (and it’s been a lot) Charleston is still my favorite.
Here are a few snapshots.
New coop update. The girls have all the most spacious laying boxes but have decided to go a different route…
Weekly Rewind: Last Week’s Video & Live
Last week we drilled down on some of the mistakes people make in their 40s & 50s that can really hinder their success in retirement.
📽️5 Financial Mistakes to Avoid in Your 40s and 50s
In this video, we discuss the top 5 money mistakes to avoid in your 40s and 50s. From failing to save enough for retirement to neglecting to create a diversified investment portfolio, we cover essential tips to help you secure your financial future. Watch now to learn how to navigate the financial challenges that come with this stage of life and set yourself up for success.
If you prefer to read, check out this topic also covered in last week’s Substack:
📽️Financial Mistake: Overspending on Kids & Neglecting Savings in Your 40s & 50s
In last week’s live episode (Friday, 10am EST on YouTube) I focused on one of the biggest financial mistakes people in their 40s and 50s make—overspending on their children at the expense of neglecting their personal savings. I outline the consequences of this decision and provide tips on how to strike a balance between supporting your children and securing your own financial future.
📆📽️Live This Week: Friday 10am EST:
Life Insurance is NOT an Investment! 4 Reasons Why You're Wasting Money!
Are you under the impression that life insurance is a smart investment for your financial future? Think again! In this live, I'll explain four reasons why it is absolutely not an investment and should not be treated as such. Watch to learn the truth about life insurance and why it's important to understand its true purpose. Watch this video before you buy permanent life insurance and avoid making a costly mistake!