Insurance Agents and Brokers
How a Good Insurance Agent Helps Your Financial Planning
There are some differences between an insurance agents and insurance brokers, mainly having to do with the ability to write certain policies and issue binders. Most people rarely deal with an insurance broker and could care less about the distinction.
All insurance agents and brokers are paid by commission. There are insurance consultants around, but are mainly used by businesses to ensure proper coverage, especially with unusual risks.
Most normal people need life, health, homeowner's, auto and disability insurance. There are full spectrum insurance brokers who can handle all these needs.
Not all insurance carriers will insure against all risks. State Farm or Allstate will issue homeowners, auto and umbrella policies, but not necessarily health, life or disability insurance.
If you go to a State Farm agent, all he will sell you is State Farm policies. If you go to an independent insurance agent, you won't get State Farm, but you will be exposed to other carriers, many of whom you never have heard of.
Most "normal" homeowners, auto, comprehensive general liability (for businesses) and umbrella policies are the same, using form contracts approved by the ISO - an insurance industry group that specializes in measuring, managing and controlling risk.
So all things being equal, it doesn't matter who issues your liability coverage. Go with the cheapest. Just make sure the company is financially solvent and able to cover losses. Your agent can give you their AM Best ratings. Stick with A or above.
You will find much more variation in heath and disability policies. You either have to depend on the agent or plow through the legalese yourself to know what you are getting.
With the internet, you can compare plans and premiums online. Even if you don't buy online, you should be able to pick up some valuable information.
Term life insurance, which is all most families need, is inexpensive and comes with a simple policy - they will pay so much if you die while the policy is in force.
There will be a few exclusions having to due with suicide and deliberately hidden medical conditions, but, other than that, the policy is pretty straightforward.
Shop online and buy a term policy for the coverage you need from a A or better ranked company. If the company isn't licensed to sell in New York, which has the strictest insurance laws in the US, go with another company.
[ Some insurance companies that advertise heavily on TV apparently allow you to cut certain coverages in order to reduce your premiums. The average layman should not make such a decision on their own.]More About Financial Professionals
Financial Planners
StockBrokers
Attorneys
