5 Things Your Life Insurance Advisor Isn't Telling You

It’s no secret, we live in the age of transparency. It’s become more and more important to be transparent in every area of your life. As life insurance providers we realized many of the clients that come to us have been lied to by other advisors. So we thought it would be fun to clear up the 5 things your life insurance advisor isn’t telling you.

Your advisor is working on commission

The vast majority of life insurance advisors today are paid 100% commission. And they are not paid hourly or salary. Strictly commission. To make matters worse their commission is based on how much you pay per month for your life insurance. The more you play, the more they make.

Can you see how that’s a little problematic?

Now there are some setbacks for the advisor. One of them being “chargebacks”. A chargeback occurs when you the client either cancel their policy or pass away in the first 2 years of owning your policy. In this case, the advisor would have to pay back 100% of the commission they received.

The counter to this is to work with a company that has salary-only advisors. Even though there are only a few companies today that offer this, it will likely be the future of life insurance.

Are you really getting the best policy?

You see many companies in Canada claim to be a broker. However, that doesn’t mean they have access to every company in Canada. In fact, most brokers only have access to a select few.

It’s good to ask your broker which companies they work with.

If they only have access to a handful of companies you are left to wonder if you have the best policy for you or the best policy that particular advisor could get you. This may mean you are overpaying or receive fewer benefits than other competitors.

Are you missing out on savings?

There’s a number of ways you could be overpaying for your coverage.

Some companies might be very competitive with people between the ages of 30-40. But overpriced for anyone over 40. And each company is a little different. It may be possible to find a company that is more suited to your age or health status. Simply by changing your provider you may be able to save a little extra money every month.

This is only one of several different ways you could save on your premiums.

How you apply matters

For some reason, people lie on their applications thinking they will get a better rate. Unfortunately, this is also considered either fraud or misrepresentation. Most insurance companies would not be liable to pay out your benefits if they can prove you committed fraud.

It’s always better to be 100% honest with your application as it can be the reason your loved ones are financially protected.

Your need for life insurance changes

Unlike stocks, where you might have to review your portfolio every month, life insurance a little more long-term of a play. That being said, it’s not a set and forgets. Life insurance needs should be considered every 2-5 years depending on what changes in your life. And the good news is that as we get older typically our need for life insurance decreases.

All in all, life insurance is something that is incredibly necessary if you have someone who depends on you financially. But don’t let these 5 tips get past you.