This idea is not as strange as it sounds. I will tell you why. First of all, the life insurance marketplace is very complex. Hundreds of companies are licensed to sell policies. A wide variety of products are available, each with various bells and whistles. Which one it is right for you? Not an easy question.
Life insurance underwriting is hugely complicated. Think about all the factors that are considered: current health, personal medical history, family medical history, lifestyle, hobbies, travel habits, vocation, driving record, criminal record, financial record. I know of no other financial transaction that requires such scrutiny. Is your story a good one? Good enough to get a really good rate? Another good question.
One has to face his own mortality in order to be motivated to buy. People can purchase a home, a business, or any other household or business item – and even any other form of insurance – and the fact that they will die is incidental at best. With life insurance, you have to admit that it will happen. If you are smart, you will like acknowledge it could happen tomorrow. Who even wants to talk about death, let alone budget money to prepare for it?
It is a wonder that people ever buy this product. And yet, over several hundred years of history, a gigantic amount of people have done so. My question is this: was the process as easy for them as it should have been? Did they end up truly satisfied? You know as well as I do that the answer to both these questions is very frequently “no.” The experience was not as good as people would like. And for every consumer who felt dissatisfied, I am sure there are many more who aborted the process and didn’t get the coverage at all.
These issues must be faced when making any big purchase. A healthy combination of business savvy, negotiation skills, and values clarification are all needed to make a big move. They come into play when buying a house, buying a business, making a big investment, and buying life insurance. Who is available these days to help you make a smart decision?
From my point of view, the independent life insurance broker could be the best option. But it would take a certain breed of cat to get the job done. First of all, he has to be a life insurance specialist. If he is a generalist in that he sells many insurance and investment products, that will not suffice. The life insurance marketplace is extremely specialized, and only a specialist can master the field.
Secondly, he must view himself as your advocate. This means that he must believe in your insurability. He must know you to the point where it is clear to him that a good offer could and should be made at this time. He must then relentlessly network among his underwriting contacts to find an underwriter who believes the same. If at the end of the day that offer cannot simply be found, he must remain committed to finding you one the next time around.
Lastly, he must serve as a spiritual guide. This is not as lofty or as esoteric as it sounds. People need help thinking about and talking about major life issues. Fear and confusion is common. It is hard to talk about these topics with spouses, children, and business partners. People need to feel they are doing the right thing from both a financial point of view and also a moral point of view. After all, the insured will be dead when the benefit is paid out. People need support in reaching the point where they care enough about their legacy to fund it now.
There you have it. If the life insurance broker has developed the right set of skills and talents, he can help you make this all-important purchase with a smile on your face. Does your life insurance broker do this for you?