Choosing a company or agent

You can buy life insurance at an insurance agency, brokerage firm, bank, or directly from a life insurance company on the Internet, over the phone, or by mail. Most companies have Web sites describing their products and services and some will direct you to a local agent.

How do I choose a company?

Contact your state insurance department for a list of companies licensed in your state, then:

• Ask friends and relatives for recommendations based on their own experiences.
• Talk to an insurance agent or broker.
• Conduct an Internet search.
• Research companies at a public library.

Generally speaking, life insurers are in excellent financial health. They’re required by law to maintain reserves to guarantee that they can meet obligations to their policyholders. However, you should still verify a company’s financial strength.

You can check any company’s financial condition by looking at its rating. Rating agencies, including A.M. Best Company, Fitch Ratings, Moody’s Investor Services, Standard and Poor’s Insurance Rating Service, and Weiss Ratings, assess the financial strength of companies. Rating information is available online or in publications usually found in the business section of your public library.

How do I choose an agent?

Collect the names of several agents through recommendations from friends, family, and other sources. Find out if an agent is licensed in your state by checking with your state’s insurance department. Agents who sell variable products also must be registered with the Financial Institutions Regulatory Authority, FINRA (formerly the National Association of Securities Dealers), and have an additional state license to sell variable contracts.

Ask what company or companies the agent represents and check his or her professional accreditations. Agents often belong to professional associations that offer continuing education and grant professional credentials. The National Association of Insurance and Financial Advisors offers local educational seminars for agents. The Society of Financial Service Professionals and the Financial Planning Association offer similar training for financial planners. Agents may earn such professional designations as Chartered Life Underwriter (CLU) and Life Underwriter Training Council Fellow (LUTCF). Agents who also are financial planners may carry such credentials as Chartered Financial Consultant (ChFC), Certified Financial Planner (CFP), or Personal Financial Specialist (CPA–PFS). ( pueblo.gsa.gov )